Interim Relief in Complex Litigation

8/4/2019 Interim Relief in Complex Litigation

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INTERIM RELIEF IN COMPLEX LITIGATION

Todd J. Burke*Jahmiah Ferdinand-Hodkin**


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INTRODUCTION

This paper looks at the recent trends and developments in injunctions of all kinds interim, interlocutory

and final. It highlights select relief that can be used in mega-litigation; the relevant rules and evidentiary

considerations, potential remedies, suggested strategies, and their role in complex (and cross-border)

litigation.

I: Injunctions: The Overview

Injunctions interim, interlocutory and final are equitable remedies that are granted at the courts

discretion. The Ontario courts authority is found in section 101 of the Courts of Justice Act1and, with

respect to interlocutory injunctions, Rule 40 of the Rules of Civil Procedure.2

The tests for granting injunctions are not outlined in these provisions. Instead, the statutes simply identify

that injunctions are to be granted where it is just or convenient to do so. The applicable tests are found

in the case law.

In order for the court to obtain jurisdiction to grant an interlocutory injunction, the originating process must

include a claim for a permanent (final) injunction in the prayer for relief:3

It is a fundamental principle that in the absence of a pending proceeding, or an intendedproceeding, in which a permanent injunction is claimed, the court has no jurisdiction to

grant an interlocutory injunction. This follows from s. 101 of the Courts of Justice Actandrule 40.01 of the Rules of Civil Procedure.

That being the case, there are a few limited exceptions, addressed below, where stand-alone injunctive

relief may be granted (i.e. relief from a court that is not seized of the main action).

II: Before Commencing an Action: Norwich Orders

In 2009, the Ontario Court of Appeal affirmed litigants right to pre-action discovery of non-parties.4

The

Norwich order can be used to find and preserve assets, identify potential defendants and confirm whether

a cause of action exists.5

Given that these orders affect non-parties to potential litigation, the courts will

1R.S.O. 1990, c. C 43.

2Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 40.

3Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc. [1995] O.J No. 1535, 23 O.R. (3d) 766 at para

29 (Sup Ct J (Div Ct)).4GEA Group AG v. Ventra Group Co. and Timothy Graham, 2009 ONCA 619 [Ventra].

5Alberta Treasury Branches v. Leahy, 2000 ABQB 515, affd (2002), 303 A.R. 63 (C.A.), leave to appeal

refused (2002), 303 N.R. 392 (note) (S.C.C) [Leahycited to ABQB].


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carefully weigh the benefit to the applicant against the prejudice to the non-party. In Ventra, the Court of

Appeal stated:6

[A] Norwich order is an equitable, discretionary and flexible remedy. It is also an intrusiveand extraordinary remedy that must be exercised with caution.

This order is obtained by way of application. Because it is often used to obtain evidence which is at risk

of being destroyed, it will generally be sought ex-parte and will be combined with a request for a (time

sensitive) sealing order. In addition to meeting the substantive test set out below, the applicant must

meet the tests and requirements applicable to granting ex parte applications and sealing orders. In

particular, in ex parte proceedings the onus is on the moving party to make full and frank disclosure of all

relevant facts, including facts that may be adverse to the moving partys interests.7

The specific

requirements ofex parte injunctions are addressed in part IV, below.

The Alberta Court of Queens Bench, in Leahy,8

established the following factors to determine whether a

Norwich order should be granted:9

(a) Whether the applicant provided sufficient evidence to raise a valid claim;

(b) Whether the applicant has shown that the third party was somehow involved in thewrong;

(c) Whether the third party is the only practicable source of information;

(d) Whether the third party could be indemnified should any harm come of the order, ifgranted; and

(e) Whether the interests of justice favour the disclosure.

Since Leahy, Canadian courts have applied variations of these factors. In particular, the Ontario Court of

Appeal, in Ventra, added the requirement of establishing necessity to the five Leahy factors.10

Justice

Cronk described the necessity requirement as follows:

[] [I]n my opinion, the limits of the necessity criterion for a Norwich order must beestablished in the context and on the facts of each particular case. While an applicant for

Norwich relief must establish that the discovery sought is needed for a legitimateobjective, this requirement may be satisfied in various ways. The information sought maybe needed to obtain the identity of a wrongdoer to evaluate whether a cause of action

6Ventra, supra note 4 at para 85.

7Price Defender Co. v. Trading Source Group Inc., [2009] O.J. No. 2258 at para 8 (Sup Ct J).

8Leahy, supra note 5.

9Ibidat para 106.

10Ventra, supra note 4.


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exists to plead a known cause of action, to trace assets or to preserve evidence orproperty The crucial point is that the necessity for a Norwich order must be establishedon the facts of the given case to justify invocation of what is intended to be anexceptional, though flexible, equitable remedy.

11

If obtained, the applicant will be required to indemnify the non-party for its costs associated with

complying with the order.12

In a 2010 decision of the Ontario Superior Court,13

Justice Perell denied the applicants request to require

a non-party to disclose proprietary information that would allegedly assist the applicants in certification of

their class action. The class action was based upon the plaintiffs assertion that the defendants (car

manufacturers and dealerships) conspired to unreasonably enhance the price of motor vehicles and

lessen the competitive nature of the industry in North America. The respondent in the Norwich

application was JATO, a British company in the business of supplying automotive data to its customers(which included the defendants in the proposed class action).

In the plaintiffs materials for the certification motion, they included a report prepared by a Dr.

Biesebroeck, an economist and professor. Dr. Biesebroeck relied upon data that he had obtained from

JATO under the guise of research to be used for governments and for academic study. After receiving

the plaintiffs materials, the defendants served a Request to Inspect seeking to review the information

upon which Dr. Biesebroecks based his report. JATO refused to release the information (and threatened

to sue Dr. Biesebroeck for misappropriation). The plaintiffs Norwich application sought to compel JATO

to produce this documentation.

In JATOs responding materials it provided evidence that it would suffer irreparable harm (largely to its

reputation) if the information sought was released to the plaintiffs for the unauthorized purpose of the

lawsuit against JATOs customers.

In refusing to grant the application the Court made the following comments:

In the case at bar, when I weigh the situation and the position of the Plaintiffs, I note thatthey are suing to recover a loss of property (money) that they say the Defendants carmanufacturers wrongfully extracted from them and other consumers and to make their

case against the wrongdoers, the Plaintiffs absolutely need information from JATO, whichin no way was a party, accessory, or accomplice to the Defendants wrongdoing. When Iweigh the situation and the position of JATO, I note that it has valuable property that ithas chosen not to provide to the Plaintiffs because JATO believes that doing so will harmits enterprises goodwill and JATO does not wish to be seen to be even indirectly harming

11Ibidat para 91.

12Leahy, supra note 5.

13Tetefsky v. General Motors Corp., 2010 ONSC 1675 [Telefsky].


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its clientele, who include the Defendants. I note also that JATO submits that it is hasbeen a victim of wrongdoing because the Plaintiffs, through their witness Dr. VanBiesebroeck, have allegedly breached a contract and allegedly misappropriated JATOsintellectual property and used it for an unauthorized purpose. Thus, as I view it, thesituation is one where for the greater good of a class proceeding, the Plaintiffs ask thecourt to expropriate JATOs property and also condone an alleged misappropriation ofproperty.

I do not think that it would be in the publics interest, where the courts have a vital role inprotecting property and privacy interests, or in the interests of justice to grant thePlaintiffs utilitarian request.

14

In 2009, in contemplation of a libel action, the applicant, York University, obtained a Norwich order which

required Bell and Rogers, the non-party respondents, to disclose information which permitted York

University to identify anonymous author(s) of allegedly defamatory e-mails and web postings.

The primary discussion in this application was whether granting the order was in the interest of justice.

The court stated that it must consider the nature of the information sought, the degree of confidentiality

accorded to the information by the party against whom the order is sought, and the degree to which the

requested order curtails the use to which the information can be put.15

The court determined that, based

upon the respondents service agreement with customers and their privacy policies, the respondents

customers could reasonably contemplate that their identity may be disclosed by order of the court in the

event he or she engages in unlawful, abusive or tortious activities.16

Moreover, York University satisfied the court that it would not make use of the information obtained from

the respondents Bell and Rogers for purposes other than the intended action. Although the courts have

confirmed that the deemed undertaking rule cannot strictly apply to Norwich orders (which are designed

to procure information for the purpose of use in another proceeding), in Leahy, the court explained that

the parties should be guided by the underlying principles of the deemed undertaking rule and ensure that

the information is not used for a purpose ulterior than that for which it was obtained.17

III: Interlocutory Injunctions

The granting of an interlocutory injunction is a matter of judicial discretion, but it is adiscretion to be exercised on judicial principles.

18

14Ibidat paras 49-50.

15York University v. Bell Canada Enterprises (2009), 99 O.R. (3d) 695 at para 30 (Ont Sup Ct J),citing

Isofoton S.A. v. Toronto Dominion Bank(2007), 85 O.R. (3d) 780 (Sup Ct J).16

Ibidat paras 34-35.17

Leahy, supra note 5.18

Aetna v. Feigelman [1985] 1 S.C.R. 2 at para 7 [Aetna],citing Chesapeake & Ohio R. Co. v. Ball[1953]O.R. 843 at 854-855.


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Interlocutory injunctions prevent defendants from defined conduct for a set period of time.19

The purpose

is to protect the moving party against injury by violation of its legal rights, for which it could not be

adequately compensated by damages or which could not be cured (because the moving party is unable

to collect damages) if the matter were to be resolved in the moving partys favor at trial.20

The Court of Appeal has unanimously held that interlocutory injunctions are to be granted within the

context of an action and are not self-supporting causes of action.21

Certain limited exceptions exist to this

general rule. For instance, the court in Sun-Times found that there is provision in the Rules of Civil

Procedure for the pursuit of a Mareva injunction in the context of a pending or intended action to enforce

a foreign judgment.22

In Brotherhood of Maintenance, the Supreme Court of Canada held that it had

jurisdiction to order an interlocutory injunction where it was not seized of the main action and no

adequate alternative remedy existed.23

In Deverell, the moving party (Union) sought an injunction restraining the Toronto Star Newspaper from

outsourcing the circulation of its newspaper until the Ontario Labour Relations Boards decision on

whether the Toronto Star was guilty of unfair labour practice (associated with outsourcing secondary

distribution). The Union then sought an injunction seeking to prevent the Toronto Star from contracting-

out secondary distribution until the Board rendered its decision on the Toronto Stars alleged unfair labour

practice.

In defending against the injunction, the Toronto Star attempted to distinguish itself from Brotherhoodof

Maintenance stating that the court had no jurisdiction to grant interlocutory relief in an administrative

matter proceeding before the Board, pursuant to the Ontario Labour Relations Act.

While the court ultimately did not grant the interlocutory relief, the Court did indicate that it had inherent

jurisdiction to grant the order:

I cannot give to sections 98 and 114 [of the Ontario Labour Relations Act] the effect that[the responding party] urges upon me. It would, in my respectful view require very muchclearer language than I find in the [Ontario Labour Relations Act] to strip this court of itsvery well-established inherent jurisdiction to grant an injunction when, in the exercise ofdiscretion, it perceives that such remedy is called for. In my view, there is a gap in the

range of remedies that the Board is empowered to provide and I do not accept that the

19Robert J Sharpe, Injunctions and Specific Performance, loose-leaf (consulted on 20 January 2011),

(Toronto, Ont: Canada Law Book, 2010), Ch 2 at 2.15.20

American Cyanamid Co. v. Ethicon Ltd. , [1975] A.C. 396 (H.L.) at 408 [Cyanamid].21

Ash v. Lloyds Corp., [1992] O.J. No. 1585 (C.A.) at para 15.22

Sun-Times Media Group, Inc. v. Black, [2007] O.J. No. 795 at paras 19, 32-33 (Sup Ct J).23

Brotherhood of Maintenance of Way Employees Canadian Pacific Systems Federation v. CanadianPacific Inc., [1996] S.C.J. No. 42 at para 5 (SCC) [Brotherhood].


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legislature, by the somewhat elliptical language of sections 98 and 114, has removed thisCourt's inherent jurisdiction to grant interim injunctions in appropriate cases.

24

The ability to obtain a Mareva injunction in circumstances where the court does not have (or has notpreviously exercised) jurisdiction over the main action is further discussed in Part IV(a), below.

As a final general point on injunctions, the Rules of Civil Procedure require a moving party seeking an

injunction to give an undertaking as to damages.25

This undertaking is described as follows:

[I]t is not possible for the court to be absolutely certain that the plaintiff will succeed at thetrial in establishing his legal right to restrain the defendant from doing what he isthreatening to do. If he should fail to do so the defendant may have suffered loss as aresult of having been prevented from doing it while the interim injunction was in force; anyloss is likely to be dammum absque unjuria for which he could not recover damages fromthe plaintiff at common law. So unless some other means is provided in this event forcompensating the defendant for his loss there is a risk that injustice may be done.26

To ensure against this injustice, the moving party must undertake to abide by any order concerning

damages that the court may make if it ultimately appears that the granting of the order has caused

damage to the responding party for which the moving party ought to compensate the responding party.27

The court may waive this requirement, at its discretion.28

The Test

The Supreme Court of Canada, in RJR McDonald (RJR) confirmed the test applicable to motions for

interlocutory injunctions:29

1. Is there a serious question to be tried?

2. Would the litigant who seeks the interlocutory injunction suffer irreparable harm if it is not

granted?

3. Which party would suffer the greater harm from the granting or refusal of the interlocutory order?

24Deverell v. Toronto Star Newspaper Ltd.,[2001] O.J. No. 945 at para 15 (Sup Ct J).

25Rules of Civil Procedure, supra note 2, r. 40.03.

26F. Hoffmann-La Roche & Co. AG v. Secretary of State for Trade and Industry, [1974] 2 AII E.R. 1128,

at 1150.27

Rules of Civil Procedure, supra note 2,r. 40.03.28

Ibid.29

RJR-MacDonald Inc. v. Canada (Attorney General),[1994] 1 S.C.R. 311 at paras 82-94 [RJR];Cyanamid, supra note 20.


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Despite this three part test, the court in American Cyanamid30

was clear that this is a discretionary

remedy and the court should not be stopped from granting this relief due to technical rules and strict

requirements.31

In Struik,32

Justice Whalen confirmed that [t]he three branches of the test should be

considered as a whole, not individually.33

Serious Question to be Tried/Strong Prima Facie Case

With respect to the first part of the test, the court must be satisfied that the claim is not frivolous or

vexatious; in other words, that there is a serious question to be tried.34

It is well established that in

determining whether there is a serious issue to be tried, the moving party generally faces a low threshold.

At this stage, the court need not engage in a detailed review of the merits of the case. Upon confirming

that the action is neither frivolous nor vexatious, the motions judge will typically proceed to the second

and third stages of the test.35

However, in spite of the American Cyanamid threshold of serious question to be tried and the

prevalence of its use in Canadian courts, certain types of injunctions continue to require the more

traditional (and higher) threshold of a strong prima facie case36

Mareva injunctions and Anton Piller

orders, for example.

Interlocutory injunctions are intended to affect the interests of the parties pending trial; these orders are

not intended to finally determine the action. Nonetheless, in certain instances, the courts determination

on an interlocutory injunction can so strongly affect the course the action will take, they are de facto final.The Supreme Court of Canada, in RJR, cautioned that the court must be attentive to this possible

outcome and confirmed that where the order will amount to a final determination of the action, an

extensive review of the merits of the case should be undertaken:

Two exceptions apply to the general rule that a judge should not engage in an extensivereview of the merits. The first arises when the result of the interlocutory motion will ineffect amount to a final determination of the action. This will be the case either when theright which the applicant seeks to protect can only be exercised immediately or not at all,

30Cyanamid, supra note 20.

31Ibid.

32Struik v. Dixie Lee Food Systems Ltd., [2006] O.J. No. 3269, 150 A.C.W.S. (3d) 700 (Ont Sup Ct J)

citingAusman v. Equitable Life Assurance Co. of Canada, [2002] O.J. No. 3066 (Ont Sup Ct J) at para.17.33

Ibidat para 35.34

RJR, supra note 29 at para 44, citing Cyanamid.35

RJR, supra note 29 at para 50.36

See e.g. SparBeca v. Spork, [2009] O.J. No. 1754, 176 A.C.W.S. (3d) 834 at para 25 (Sup Ct J).


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or when the result of the application will impose such hardship on one party as to removeand potential benefit from proceeding to trial.

37

Irreparable Harm

In RJR, the court defined irreparable harm as follows:

Irreparable refers to the nature of the harm suffered rather than its magnitude. Itis harm which either cannot be quantified in monetary terms or which cannot becured, usually because one party cannot collect damages from the other.

38

This requirement speaks to the purpose of equitable remedies generally and, in particular, injunctions

preventing irreparable harm. Equitable remedies are used when the moving party establishes that

monetary damages will not sufficiently compensate it for its loss.

In complex litigation, there is often a risk that the plaintiff, even if successful, will be unable to collect

damages due to the eventual impecuniosity of the defendant(s). The Federal Court of Appeal has stated

that proof of irreparable harm cannot be inferred.39

Rather, the harm must be clear and not speculative.40

For instance, inclusion of the standard irreparable harm clause in a restrictive covenant and the

allegation of a breach of said covenant will not automatically result in satisfaction of this element of the

test.41

Evidence of actual harm must be presented.

Injunctions that freeze assets and prevent the disposal or transfer of funds can protect the plaintiffs and

ensure that they will be in a position to recover their damages, if successful. In the context of an

allegation that the moving party will be unable to collect a future damage award, the court has not

required that the moving party prove inability to collect with certainty. The court is prepared to find

irreparable harm in circumstances where it appears to the Court that the defendant will not be able to

meet a damage award42

and where it is unlikely that any substantial monetary judgment against the

corporation could be collected or enforced.43

37

RJR, supra note 29 at para 51.38Ibidat para 59.

39Centre Ice Ltd. v. National Hockey League (1994), 75 F.T.R. 240n at p 54.

40Sharpe, supra note 19 at para 2.417.

41Jet Print Inc. v. Cohen,[1999] O.J. No. 2864, 43 C.P.C (4th) 123 (Sup Ct J).

42Fednav Ltd. v. Fortunair Canada Inc., [1994] F.C.J. No. 1969 at para 16 (FCTD). Please note that this

decision precedes RJR, supra note 29, however, it has been applied since RJRand has not beenoverturned.43

Canadian Fracmaster Ltd. v. Trojan Wellhead Services, [1992] 40 C.P.R. (3d) 402 (FCTD). Pleasenote that this decision precedes RJR, supra note 29, however, it has not been overturned.


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Balance of Convenience

The final criteria, balance of convenience, involves determining which party will suffer greater damage

from granting or refusing the injunction. While it is tied closely to the previous factor, it focuses on matters

that are often not quantifiable in monetary terms.

The factors to be considered are numerous and will vary in each individual case.44

Justice Sharpe stated:

[] where an assessment of the case is impracticable and the damages questionbalanced, an assessment of balance of convenience will be determinative.

45

In this respect, the court must weigh the moving partys need for protection against the corresponding

need of the respondent to be protected against injury and determine where "the balance of convenience"

lies. The factors the court considers are fact specific and vary widely depending upon the nature of the

case:

[i]t would be unwise to attempt even to list all the various matters which may need to be

taken into consideration in deciding where the balance lies, let alone to suggest the

relative weight to be attached to them. These will vary from case to case.46

Where courts have found difficulty weighing the competing disadvantages, the courts have, on occasion,

chosen to provide detailed orders that find neither in favour of the plaintiff nor defendant. For instance, in

Grillo, the moving party (principal in a law firm) sought an injunction requiring the defendants (staff

lawyers of the law firm and a paralegal) to return client files at the break-up of the firm. The defendants

had developed and executed a plan to leave the firm, taking 250 clients with them. The court was

required to determine how lawyers fees, clients directions and lawyers access to files would be divided

upon the break-up.47

Given the delicate nature of this determination, the court prepared a detailed order

contemplating the precise handling of these files.

44Cyanamid, supra note 20 at p 408.


46Cyanamid, supra note 20 at p 408.

47Grillo v. DAngela (2009), 306 D.L. R. (4th) 370 (Sup Ct J).


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IV: Ex Parte Injunctions

The rule: notice shall be given to a responding party on a motion. A moving party may seek to dispense

with this requirement; however, unless it can demonstrate why it is absolutely necessary for the motion to

proceed without notice, the court will deny its request.48

Injunctions may be obtained without notice (a) when there is reason to believe that the defendant, if given

notice, will act to frustrate the process of justice before the motion can be decided; or (b) where there is

insufficient time or means to provide notice, and circumstances are such that any delay may defeat the

plaintiffs claim.49

Rules 37.07, 39.01 and 40.02 of the Rules of Civil Procedure govern ex parte motions. In particular, Rule

40.02 provides that an interlocutory injunction obtained without notice can only have effect for a period of10 days. If the moving party wishes to extend the time during which the injunction will apply, notice must

be given to every party affected by the order or obtain leave of the court.50

With respect to an applicants obligations for disclosure, Rule 39.01(6) prescribes that the applicant must

make full and fair disclosure of all material facts failure to do so constitutes grounds to set aside any

order made on the application.51

The concept of materiality as it pertains to this rule is defined as any

fact that would have been weighed or considered by the motions justice in deciding the issues, regardless

of whether its disclosure would have changed the outcome.52

Mareva andAnton Pillerorders are two types of interlocutory injunctions which, by their nature, must be

sought on an ex parte basis.

(a) - Mareva Injunction

The Mareva injunction is an in personam injunction used to secure the responding party's assets to

ensure that they are not rendered unavailable to satisfy any judgment that the applicant may ultimately

obtain. This is a departure from the underlying principle that execution of a defendants assets cannot be

made until judgment is obtained. However, this injunction does not create a pre-judgment right to the

defendants assets; it simply prevents the defendant from otherwise disposing of its assets.

48Gulf Islands Navigation Ltd. v. Seafarers International, [1959] B.C.J. No. 106 (SC).

49Robert Half Canada Inc. v. Jeewan (2004), 71 O.R. (3d) 650 at paras 36 and 38 (Sup Ct J).

50Rules of Civil Procedure, supra note 2, r. 40.02.

51Rules of Civil Procedure, supra note 2, r. 39.01(6).

52Forestwood Co-operative Homes Ltd. v. Pritz,[2002] O.J. No. 550, 156 O.A.C. 359 at para 26 (Sup Ct

J (Div Ct)).


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The purpose of a Mareva injunction is to make certain that if the plaintiff is ultimately successful in the

litigation, there will be assets available to satisfy the judgment. The rationale is that a defendant should

not be permitted to thwart the court's process by dissipating assets, especially assets claimed by the

plaintiff, prior to the determination of the plaintiff's entitlement to have those assets returned or to be

compensated out of those assets.

Freezing a defendants assets pending a final determination is an extraordinary remedy. In Yemec, the

Court highlighted the inherent unfairness ofMareva injunctions as follows:

Ex parte injunctions in general and Mareva injunctions in particular are often the bane ofthe judicial process. They present judges with the most vexing of issues on an immediateand urgent basis while simultaneously obliging the moving party to make full and frankdisclosure of the relevant facts, if known, including facts which may explain the position

or inure to the benefit of the defendant. Moreover, where a Mareva injunction is ordered,a profound unfairness occurs since a defendants assets are tied up indefinitely, in moresevere circumstances than even with an execution after judgment, which may force thedefendant to settle rather than await vindication after trial.

53

The Test

The test for this relief was set out by the Court of Appeal in Chitel:54

1. A strong prima facie case on the merits;

2. good reason to believe that the defendant will dissipate its assets pending trial with the result of

avoiding judgment; and

3. the balance of convenience favours the granting of the order.

The first criteria requires evidence of a strongprima facie case. However, in Tracy,55

the British Columbia

Court of Appeal held that there is no strict formula and declined to set aside a Mareva injunction simply

because the trial judge applied the threshold of a good arguable cause, as opposed to a strong prima

faciecase:

The chambers judge used the test of good arguable cause. I do not consider that astrict formula should be applied. Whereas, the Supreme Court of Canada in Aetnaappeared to favour strong prima facie case, that Court also appeared to leaveconsiderable room for courts to frame the test as fits the nature of the case before them.Mooney No. 2. recognized both standards strongprima facie case and good arguable

53United States of America et al. v. Yemec et al., [2003] O.J No. 3863, 67 O.R. (3d) 394 at para 1 (Sup

Ct J) [Yemec].54

Chitelv. Rothbart(1982), 39 O.R. (2d) 513 (CA) (QL) at 16-17 [Chitel].55

Tracy v. Instaloans Financial Solutions Centres (B.C.) Ltd.,2007 BCCA 481, 285 D.L.R. (4th) 413.


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case, as formulations that have been used. I expect that the difference in words is adifference without practical consequence. In either case, it is more than an arguablecase, and may be met by an assessment that does not reach the bound to succeedthreshold.

56

Under the second element of the test the applicant must persuade the court that the defendants are

removing, or there is a real risk that they are about to remove, their assets from the jurisdiction to avoid

the possibility of a judgment, or that the defendants are otherwise dissipating or disposing of their assets

so as to render the possibility of future tracing of the assets remote, if not impossible in fact or in law.57

Importantly, it must be clear that the defendants purpose in disposing of its assets is the avoidance of a

potential judgment:

[I]t is only if the purpose of the defendant when removing assets from the jurisdiction orthe dissipating or disposing of them is for the purpose of avoiding judgment that a Marevainjunction should be issued. I think that this view is consistent with Estey J.s statementthat the overriding consideration is the threat to defeat his adversary.

58

Evidence of this purpose may be inferred where there is evidence of a strongprima facie case of fraud or

fraudulent misappropriation on behalf of the defendant.59

In Boussoulases, the court accepted the applicants evidence of transfers of assets from company to

company, moves from premises to premises, assignment and collection of accounts receivable by a

related company and refusals to disclose assets, receipts or expenses in support of the second element

of the test.60

The final criteria is the balance of convenience. Generally, the applicant argues that without the

injunction any judgment that they may ultimately obtain will be of no effect, as the defendant will have no

assets left and the debt will be uncollectable. Evidence obviously must be presented to substantiate this

allegation. Conversely, the defendant will argue that by tying up its assets for an indefinite period of time

until the action is resolved, the defendant will be unable to afford reasonable living or operational

expenses. However, the defendant can reasonably request a partial exemption from the freeze which will

permit it to access some of its assets and, therefore, this will not constitute grounds for irreparable harm.61

As in all ex parte applications, the applicant is required to make full and fair disclosure. If there is less

than full disclosure, in a material way, or if the court is misled on materials facts, this can result in the

56Ibidat para 54.

57Chitel, supra note54 at 532-33.

58R v. Consolidated Fastfrate Transport Inc., [1995] O.J. No. 1855 (CA).

59663309 Ontario Inc. v. Bauman, [2000] O.J. No. 2674 at para 29 (Sup Ct J).

60Royal Bank of Canada v. Boussoulas, 2010 ONSC 4650 at para 17 [Boussoulas].

61Ibidat para 18.


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refusal of the injunction62

or the dissolution of a granted Mareva injunction.63

In the 2010 Ontario Superior

Court decision ofBoussoulas, the Court found that the applicant had met all aspects of the test, however,

disentitled it to the equitable relief on the basis that it had overstated its case, made misstatements of

evidence and extravagant, unsupported allegations. As a result of this unacceptable conduct, the relief

was denied.64

Jurisdiction

The Supreme Court has concluded that once a court has jurisdiction over a matter, it has the power to

order injunctive relief regardless of the territorial scope of the orders application.65

A courts jurisdiction

is determined through a two part analysis: the court first considers whether it has jurisdiction (jurisdiction

simpliciter) and then whether it should exercise it (forum non conveniens).

While the real and substantial connection test is a legal rule, the forum non convenienstest is discretionary. The real and substantial connection test involves a fact-specificinquiry, but the test ultimately rests upon legal principles of general application. Thequestion is whether the forum can assume jurisdiction over the claims of plaintiffs ingeneral against defendants in general given the sort of relationship between the case, theparties and the forum. By contrast, the forum non conveniens test is a discretionary testthat focuses upon the particular facts of the parties and the case. The question iswhether the forum should assert jurisdiction at the suit of this particular plaintiff againstthis particular defendant []

66

The Mareva injunction is an in personam remedy which can be granted to freeze assets both inside and

outside the courts territorial jurisdiction. The courts in personam (or personal) jurisdiction exists (a) onconsent of the defendant; (b) based upon the defendants ordinary residence; or (c) if the real and

substantial connection test is satisfied.67

The test for both local and worldwide injunctions is the same: is

there a real risk of disposal of those assets so that any judgment would be inconsequential.68

The

foundation of this wide reaching jurisdiction is the basic principle of judicial comity.69

As noted previously, the Supreme Court of Canada has established that a court may have jurisdiction to

order the discrete remedy of an interlocutory injunction where it is not seized of the main action and no

62

Ibidat para 21.63Chitel, supra note 54 at 519, 523, 528; Yemec, supra note 53 at para 35.

64Boussoulas, supra note 60 at paras 34-35.

65Impulsora Turistica de Occidente, S.A. de C.V. v. Transat Tours Canada Inc., (2007) 281 D.L.R. (4th)

385 (SCC).66

Muscutt v Courcelles (2002), 60 O.R. (3d) 20 (CA) at para 43 [Muscutt].67

Precious Metal Capital Corp. v. Smith, [2008] O.J. No. 4956 at para 20 (Sup Ct J) [Precious].68

Hamza v Hamza, [1997] A.J. No. 836 at para 23 (Atla. CA).69

See e.g. Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, (SCC); Hunt v. T&N plc,[1993] 4 S.C.R. 289 (SCC).


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adequate alternative remedy exists.70

To exercise this discretion, the court must be satisfied that it has a

justiciable right, wherever that right may fall to be determined.71

For instance, if the moving party has

commenced an action in California and the defendants primary assets are in Ontario, the moving party

may elect to seek the assistance of the Ontario court in granting the free-standing remedy of a Mareva

injunction as opposed to completing the two-step process of obtaining the Mareva in California and

subsequently moving to enforce in Ontario.

Further, given that assets are often held by third parties (a bank, for example), moving parties must be

mindful of ensuring that the order they seek sufficiently binds third parties from transferring assets

belonging to the defendant. This third party involvement is often what gives rise to interprovincial and,

sometimes, worldwide orders.

As explained above, determination of the courts jurisdiction is based upon a two step analysis. For the

purposes of this paper, we only provide a brief overview of the tests involved.

Jurisdiction Simpliciter

When jurisdiction is contested, the moving party has the burden of satisfying the court that there is a real

and substantial connection between the court and the responding party or the subject matter of the

litigation.72

This is a low threshold test; at this stage the court is not seeking to determine that it is the

most appropriate forum for litigation, only that it is a potential forum.

In 2010, in Van Breda v. Village Resorts Ltd.,73

the Ontario Court of Appeal reconsidered the eight part

test for jurisdiction simpliciteras originally set out in Muscutt74

and re-defined it as follows:

First, the court must determine whether the claim falls under rule 17.0275

(excludingsubrules (h) and (o)) to decide whether a real and substantial connection with the

jurisdiction in question is presumed to exist. If one of the connections identified in rule17.02 is made out then the defendant bears the burden of showing that a real andsubstantial connection does not exist. If one of the connections is not made out theplaintiff bears the burden of showing that a real and substantial connection does exist.

76

70Brotherhood, supra note 23at para 5.

71Channel Tunnel Group Ltd. v. Balfour Beatty, [1993] A.C. 334 (H.L.), cited in Brotherhood.

72Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon, [1994] 3 S.C.R. 1022 (SCC).

73[2010] O.J. No. 402 (CA) [Van Breda].

74Muscutt, supra note 66.

75Rules of Civil Procedure, supra note 2, r.17.02.

76Van Breda, supra note 73 at para 109.


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The first step will only result in a rebuttable presumption, which does not preclude the other party from

either proving or disproving that a real and substantial connection exists.77

The core of the analysis rests upon: (a) the connection between the forum and the plaintiffs claim; and

(b) the connection between the forum and the defendant. The consideration of fairness should not be

seen as a separate inquiry, rather it is a tool to assess the relevance, quality and strength of the

connections between the forum, the plaintiffs claim and the defendant.78

The other factors in Muscutts eight-part test should not be treated as independent factors. They should

be treated as general legal principles that bear upon the analysis. These factors will assist the court in

assessing the significance of the connections between the forum, the claim and the defendant.79

Forum Non Conveniens

Once it is established that a court has jurisdiction, the defendant can contest the court exercising its

jurisdiction under the doctrine offorum non conveniens. This doctrine permits the court to, at its

discretion, decline jurisdiction on the basis that another, more appropriate, forum exists. This discretion

may not be exercised lightly: the Supreme Court has stated that displacing a plaintiffs choice of forum

requires a clearly established more appropriate option.80

In 2009, the Ontario Court of Appeal set out three principles in Silvestri v. Hardy81

to illustrate this

discretionary role. The three underlying principles are:

1. to displace the plaintiffs choice of forum, a more convenient forum must be clearly established;

2. the balancing of the relevant factors typically used to assess the connections to each forum

should aim to achieve the twin goals of efficiency and justice; and

3. the motion judge should not adopt an aggressive approach to fact finding.82

If, after an analysis of these three principles, the court determines that there is not a more convenient

forum, then the jurisdictional issue will be disposed of and litigation will proceed.

77Ibidat para 72.

78Ibidat paras 109 and 98.

79Ibidat paras 84 and 109.

80Amchem Products Inc. v. British Columbia (Workers Compensation Board), [1993] 1 S.C.R. 897 (SCC)

[Amchem].81

Silvestri v. Hardy, [2009] O.J. No. 1948 (CA).82

Ibidat para 7.


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(b) Anton Piller

TheAnton Pillerorder, while considered to be the most draconian83

of all injunctions, is a powerful tool

for litigators in highly technical and complex proceedings. These orders grant the plaintiff access to the

defendants premises to inspect and remove items over which the plaintiff asserts a proprietary claim.84

Simply stated, an Anton Pillerorder provides the plaintiff with access to the evidence it will need to

substantiate its case before the defendant can dispose of it.

The courts jurisdiction to grant these orders has been found in three sources: (a) its inherent jurisdiction

to control its own process; (b) the Rules of Civil Procedure; and (c) under section 101 of the Courts of

Justice Act.

In addition to outlining the applicable test, this section will address the practical, but often neglectedaspect of drafting and carrying out anAnton Pillerorder, so as not to infringe upon the defendants rights.

The Test

The Supreme Court of Canadas decision in Celanese Canada Inc. v. Murray Demolition Corp.85

set the

standard four part test for granting anAnton Pillerorder. The following elements are essential:

1. the plaintiff must demonstrate a strongprima facie case;

2. the damage to the plaintiff by the defendants alleged misconduct, potential or actual, must be

very serious;

3. there must be convincing evidence that the defendant has in its possession incriminating

documents or things; and

4. it must be shown that there is a real possibility that the defendant may destroy such material

before the discovery process can do its work.86

Practice

Courts do not awardAnton Pillerorders often, but once counsel successfully obtains the order they must

be careful to ensure that execution is conducted in a manner that upholds the integrity of the legal

83Celanese Canada Inc. v. Murray Demolition Corp.,[2006] 2 S.C.R. 189 at para 32 (SCC) [Celanese].

84Sharpe, supra note 19at para 2.1100.

85Celanese, supra note 83.

86Ibidat para 35.


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profession. For instance, in Celanese, evidence was seized which was privileged and that privilege was

not protected in the execution of the Anton Pillerinjunction. As a result, the evidence was excluded and

the plaintiffs solicitor was removed from the case.

The Anton Pillerorder gives the applicant the ability to search and seize items at the defendants

property. As Justice Lamer stated in Descoteaux v. Mierzwinski, [s]earches are an exception to the

oldest and most fundamental principles of the common law, and as such the power to search should be

strictly controlled.87

In Celanese, a search and seizure under an Anton Pillerorder was conducted

improperly leading to plaintiffs counsel obtaining privileged documents. As a result, the court laid out

basic principles for drafting and carrying out Anton Pillerorders. First, the Court highlighted several basic

protections for the rights of the parties, including:

1. The order should appoint a supervising solicitor who is independent of the plaintiff or its solicitors

and is to be present at the search to ensure integrity.

2. Absent unusual circumstances the plaintiff should be required to provide an undertaking to pay

damages in the event the order turns out to be unwarranted.

3. The scope of the order should be no wider than necessary.

4. Terms setting out procedures for dealing with confidential or privileged documents should be very

clear.

5. The order should contain a limited use clause.

6. The order should provide that the materials seized to be returned as soon as practicable.88

Second, the Court described several characteristics required of the conduct to be displayed during the

search, including:

1. The order should provide that the search be commenced during normal business hours.

2. No items should be removed, unless in the presence of the defendant or a person who appears

to be a responsible employee of the defendant.

3. The person who may conduct the search should be specified in the order.

87Descoteaux v Mierzwinski, [1982] 1 S.C.R. 860 at p. 889 (SCC).

88Celanese, supra note 83 at para 40.


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4. A copy of the statement of claim, the order, and supporting affidavits should be explained to the

defendant or responsible corporate officer.

5. A detailed list of all evidence seized should made and inspected by the defendant when the

search is complete.

6. Where ownership is disputed, said materials should be provided for safekeeping to thesupervising solicitor.

89

Finally, the court described proper procedures following the search, including:

1. The supervising solicitors responsibilities continue beyond the search itself.

2. The supervising solicitor should be required to file a report to the court describing the search.

3. The court may wish to require the plaintiff to file and serve a motion for review of the execution of

the search returnable within a set time to ensure the court automatically reviews the supervising

solicitors report.90

Draft orders placed before the motions judge must be explicit and should contain provisions to deal with

the aforementioned principles.91

A clearly drawn and well-thought out order will not only guard the

defendant from unreasonable searches, but will also protect the plaintiff and plaintiffs counsel from taking

evidence that may not be admissible at trial.

In Jans,92

a British Columbia Supreme Court case, solicitors were reprimanded for their conduct displayed

during the execution of an Anton Pillerorder. The unauthorized conduct included using unauthorized

individuals to perform the search, searching and taking possession of material not covered by the order,

videotaping unauthorized parts of the search, asking the defendants questions that were subject to

privilege, and failing to explain the order to the defendants and advise them of their right to legal

assistance.93

As a result of these deficiencies, the court held that the appropriate remedy was to remove

the solicitors from the record and exclude the documents from use in the litigation.94

89Ibid.

90Ibid.

91A precedent Order can be found at www.ontariocourts.on.ca/scj/en/commerciallist/index.htm

92Grenzservice Speditions Ges.m.b.H v. Jans (1995), 129 D.L.R. (4th) 733, [1996] 4 W.W.R. 362

(BCSC). Please note, Jans pre-dates Celanese, supra note 83, and is a good guide in terms of assessingappropriate conduct.93

Sharpe, supra note 19 at para 2.265.94

Ibid.


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However, in Bell Expressvu Limited Partnership v. Morgan95

, a 2008 Superior Court case, it was held that

Anton Pillerorders should not be set aside absent exceptional circumstances such as material non-

disclosure or scandalous or abusive behaviour.96

V: Interim Preservation Orders

Under Rule 45.02 of the Rules of Civil Procedure97

a party may bring a motion for the interim

preservation of property. This order is sought tofreeze a fund that is not owned by a defendant but is

earmarked to the litigation in issue.98

It is different from the previously discussed Mareva injunction in

that Mareva injunctions relate specifically to the defendants property. Interim preservation orders are

directed at funds not owned by the defendant.

In Stearns v. Scocchia, the three part test was enunciated:

1. that the party claims a right to a specific fund;

2. that there is a serious issue to be tried regarding the party's claim to that fund; and

3. the balance of convenience favors granting the relief sought.99

With respect to the first question, Justice Perell in Gillott,100

stated [t]o succeed under rule 45.02, the

plaintiff must have a proprietary claim against the specific funds beyond their utility to satisfy his or her

claim against the defendant.101 In other words, the specific funds in question must be earmarked for the

litigation.

Regarding the second question, it is important that this standard be distinguished from the higher

standard required for Mareva injunctions. While both remedies place a freeze on assets, the interim

preservation order uses the lesser standard of a serious issue to be tried.

Justice Smith, in Stearns v. Scocchia, explains that while both the Mareva injunction and a Rule 45.02

motion seek similar relief, they are to be used in different situations. He continued by saying that:

95[2008] O.J No. 1144, 65 C.P.R (4th) 316 (Sup Ct J).

96Ibidat para 22.

97Rules of Civil Procedure, supra note 2, r.45.02.

98Stearns v. Scocchia, [2002] O.J. No. 4244, 118 A.C.W.S. (3d) 34 (Sup Ct J) [Stearns].

99Ibidat para 9.

100DIRECTV Inc. v. Gillott(2007), 84 O.R. (3d) 595 (Sup Ct J).

101Ibidat para 59.


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there is a stricter test required for a Mareva injunction and for good reason - it restrainsthe defendant from dealing with his own property thereby requiring proof of a strong

prima facie case. The plaintiff in a Rule 45.02 motion need only claim a right to the fund -a lesser test essentially because the fund is not the asset of the defendant.

102

Smith, J. demonstrates the difference between a Mareva injunction and a Rule 45.02 order by setting out

three aspects of a motion to freeze assets: 1) the subject matter, 2) the purpose/objective, and 3) the

test employed:103

(a) Subject matter - When seeking a Mareva injunction, the moving party seeks torestrain a defendant from disposing of some or all of his assets before trial. In a motionunder rule 45.02, the moving party claims a right to a specific fund and is seeking to havethe fund preserved pending the determination of entitlement to the fund at trial [].

(b) The purpose/objective - the purpose of a Mareva injunction is to protect the claimant

who is asserting a general claim. The assets that the claimant seeks to freeze are only ameans of satisfying a likely or probable judgment against the defendant. In contrast, thepurpose of a motion under rule 45.02 is to protect a claimant who is asserting a specificproprietary claim to assets prior to trial.

(c) The Test employed - case law supports the assertion that the threshold for an orderunder rule 45.02 is lower than that for a Mareva injunction. In the former, the movingparty is required to show that there is a serious issue to be tried,

while the party seeking

a Mareva injunction must demonstrate a strongprima facie case.

In Belajac,104

a 2008 Ontario Superior Court of Justice case, the parties were the heirs of the Estate of

Michael Belajac. The plaintiff was residing in the late Mr. Belajacs apartment. The defendant was the

Estate Trustee.

In the motion, the defendant sought an order for, inter alia, the vacant possession of the apartment which

would permit her to complete the sale of the property to the benefit of Mr. Belajacs estate.105

The plaintiff

argued that he was a tenant of the apartment, as such the Board under the Residential Tenancies Act

had jurisdiction over their dispute and the court had no jurisdiction in respect of the relief sought.106

Conversely, the defendant stated that plaintiff was not a tenant as he was merely occupying his late

fathers unit as a result of a non-arms length family arrangement and although he paid no rent, he was

permitted to reside there by the Estate Trustee.107

102Stearns, supra note 98 at para 12.

103Ibidat para 14.

104Belajac v. Belajac, [2008] O.J. No. 1058, 166 A.C.W.S. (3d) 405 (Sup Ct J).

105Ibidat para 42.

106Ibidat para 43.

107Ibidat para 44.


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The court determined that in accordance with Rule 45.01(2) there was reason for the property to be sold

(for the benefit of the estate), thus preserving the property with the Estate Trustee. The court stated:

In order to preserve the property, to facilitate the sale and to protect the Estate from suit,the plaintiff is required to deliver vacant possession to the Estate on or before 6:00 p.m.on March 26, 2008. I find the plaintiff occupies the unit at the Davey Drive propertyneither as a manager nor as a tenant and accordingly, he is ordered to deliver up vacantpossession to the Estate. In addition, he is ordered to immediately deliver all of thebooks, records and personal property of the deceased to the Estate Trustee including thecontents of the unit he now occupies at 114 Davey Drive, Orillia.

108

By determining that the plaintiff was merely an occupier and not a tenant under the Residential Tenancies

Act, the court had jurisdiction to grant the motion for interim preservation of property.

VI: Quia Timet

Quia timetinjunctions offer relief to a plaintiff before any actual harm has occurred. These injunctions are

before a motions judge without evidence of actual harm, however, with evidence that there is a high

probability that the alleged harm will occur.109

In Belron,110

a 2009 British Columbia Supreme Court case, the plaintiff sought a quia timet injunction

restraining the defendant from operating a website. The plaintiff, Belron, had acquired the corporate

defendant, TCG. The basis for Belron's injunctive relief arose out of non-compete, non-solicitation, and

non-interference agreements that had been entered into as a condition precedent to this acquisition.

Belron alleged that it would suffer financial loss from business diverted away from its operations and

argued that there would be a depreciation of its goodwill.111

The court denied the motion on the basis that

Belron could be compensated by damages if its claim was ultimately proven. To this end the court stated:

Despite the forceful submissions of Belron's counsel, Belron has not shown that, should itprove its claim, the assessment of damages to which it would be entitled is any moreformidable than it is in a spectrum of other cases where damages are routinely fixed bythe court.

112

Recently the court considered whether to issue a quia timet injunction prior to the 2010 G20 summit, in

Toronto.113

At issue in this motion was the use of sound blasters by the Ontario Provincial Police and

Toronto Police Service. The applicants, the Corporation of the Canadian Civil Liberties Association, its

108Ibidat para 54.

109Operation Dismantle Inc. v. Canada,[1985] 1 S.C.R. 441(SCC).

110Belron Canada Inc. v. TCG International Inc.,2009 BCSC 596.

111Ibidat para 97.

112Ibidat para 103.

113Corp. of the Canadian Civil Liberties Assn. v. Toronto (City) Police Service, 2010 ONSC 3525.


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Project Director, Abby Deshman, its General Counsel, Nathalie Des Rosiers, and the Canadian Labour

Congress, brought a quia timetmotion on the basis that the sound blasters would cause irreparable harm.

In the written decision, the court stated:114

The approach described by Justice Sharpe in his text is one that I find practical andhelpful:

While the test has been posed in terms of the temporal imminence ofharm, it is submitted that this is not the only, or necessarily best, way todescribe the analysis which is suggested by the results reached. Whatthe court does look for is the information necessary to predict withconfidence not only that the harm will occur but also other relevantcircumstances which will then exist. In other words, the court must besatisfied that the relevant factors which bear upon the granting ofinjunctive relief have crystallized. Cases in which quia timet injunctions

have been granted may be taken to suggest that the notion ofcrystallization is an appropriate way to describe the state of affairs thecourts require before granting injunctive relief.

[]

The difficulties in predicting future conduct and future harm come to the fore most acutelyduring a court's consideration of the balance of convenience. As Justice Sharpe haswritten:

A related matter is the weighing of the benefit the injunction confers onthe plaintiff against the cost it imposes on the defendant. Again, thisassessment can be made only where the court has a firm grasp on the

actual effect the harm will have on the plaintiff at the time it occurs andthe cost alleviating or avoiding that harm will impose upon the defendant.If the situation is still fluid or uncertain, an injunction granted prematurelymay impose unjustified costs on the defendant and, of course, this isparticularly the case where the plaintiff seeks a mandatory injunction.

115

VII: Jane and John Doe Orders

John/Jane Doe orders are used where the moving party is unaware of the identity of the defendants.

They have been used to prevent protesters, whose names could not be identified, from blocking public

roads;116

and, in copyright or trademark infringement cases where offenders names were not yet

114Ibidat paras 88 - 89.

115Ibidat para 89.

116MacMillan Bloedel Ltd v. Simpson, [1996] 2 S.C.R. 1048 (SCC).


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known.117

Generally, where the moving party meets the test for the associated relief, the courts will grant

these orders.118

The Supreme Courts decision in MacMillan Bloedel Ltd v. Simpson, answered in the affirmative the

question of whether an injunction could be effective against a non-party to the litigation.119

The orders in

that case named several defendants by name, followed by the general description of John Doe, Jane

Doe, and Persons Unknown.120

The rationale for this relief is that a plaintiff should not be deprived of a

remedy simply because the defendant has successfully hidden its identity.121

However, the Federal Court,

in Montres Rolex S.A. v. Balshin,122

stated that John/Jane Doe orders should not be issued unless the

plaintiff has taken reasonable steps to attempt to identify the defendants.123

In 2000, the British Columbia Supreme Court in Slocan Forest Products Ltd v John Doe,124

heard a

motion to extend a previously existing injunction against unknown parties. At issue was the fact that these

unknown third parties were blocking Slocan employees from carrying out their duties the unidentified

respondents were obstructing a road needed by employees to access Slocan's forestry site. Slocan

attempted to obtain police assistance, but the police refused without a court order. The court noted that

apparently no effort had been made to identify the third parties, however, the court further noted that for

Slocan's objectives, names did not matter. To this point, the court stated:

The point of the injunction sought here is not to define the situation of parties pending anultimate resolution of a legal issue between them. It is to get the court to articulate aproscriptive rule, binding generally on the public, governing present and future behaviour

so that Slocan can get on with its activities.125

In granting the continuation of the order, the court placed greater emphasis on the applicants end goal

and not the failures associated with the steps taken to identify the unknown third parties.

117

Montres Rolex S.A. v. Balshin,[1993] 1 F.C. 236 (FCTD) [Balshin]. Please note that this decisionpreceded MacMillian, ibid, however, it has not been overturned.118

Ibid.119

Jeffrey Berryman, The Law of Equitable Remedies (Toronto: Irwin Law, 2000) at 35.120

Ibidat 36.121

Ibidat 37.122

Balshin, supra note 117.123

Berryman, supra note 119.124

2000 BCSC 150.125

Ibidat para 41.


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VIII:Anti Suit

Given the significant consequences of indirect interference with the process of the foreign

court, out of respect for the principle of comity, "... great caution should be exercisedwhen invoking the power to enjoin foreign litigation." The bar has been set very high.

126

The anti suitinjunction is a tool for defendants wishing to restrain foreign proceedings by compelling the

plaintiff to litigate within another jurisdiction.127

For the purpose of this paper, a brief description of the

Supreme Courts consideration of this type of injunction will be discussed, without a discussion of

jurisdictional issues which had been previously described.

The leading case in Canada is the Supreme Courts decision in Amchem Products Inc. v. British

Columbia (Workers Compensation Board).128

Justice Sopinka clarified the difference between a motion

for a stay and an anti suitorder:

In the case of the stay the domestic court determines for itself whether in thecircumstances it should take jurisdiction whereas, in the case of the injunction, it in effectdetermines the matter for the foreign court.

129

The test for granting an anti suit injunction is based upon the principles of comity. Justice Sopinka

described it as twofold:

1. whether the domestic forum is the natural forum, that is the forum that on the basis of relevant

factors has the closest connection with the action and the parties;

2. whether there is another forum that is clearly more appropriate.130

Justice Sopinka further stated that [Is it] unjust to deprive the plaintiff in the foreign proceeding of some

personal or juridical advantage that is available in that forum.131

The injunctive relief should not be

granted if a foreign proceeding has not been launched or if the applicant has already sought, and been

denied, a stay by the foreign court.132

126Ibidat para 2.


128Amchem, supra note 80.

129Ibidat para 23.

130Ibidat para 53.

131Ibidat para 55.



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In Precious Metals Corp Inc.,133

a 2008 Ontario Superior Court of Justice case, the parties were involved

in litigation in Ontario and in the United Kingdom. The moving party (plaintiffs in the Ontario action,

defendants in the U.K. action) sought an anti suitinjunction prohibiting the responding party (defendants

in the Ontario action, plaintiffs in the U.K. action) from pursuing litigation in any jurisdiction outside of

Ontario. The matters addressed in each action were substantially the same.

The respondents argued that the moving party had not brought a motion for a stay of proceedings in the

U.K. and, as such, no anti suitinjunction could be awarded. The moving party argued that (a) Ontario had

previously been determined to be the forum conveniens; (b) if required to proceed with a stay motion in

the U.K., the plaintiff would be required to expend substantial funds in circumstances where it has

demonstrated impecuniosity; and (c) the plaintiff would be exposed to jurisdictional disadvantage if it were

required to seek a stay in the U.K.134

The Court preferred the moving partys position and awarded a

(partial) anti suit injunction. It exercised its discretion and limited the injunction to the U.K. and not the

moving partys requested any jurisdiction outside of Ontario.

CONCLUSION

Complex litigation affords a myriad of opportunities to explore interim relief and these possibilities should

be carefully considered. Due regard must be given to the evidentiary tests and the lawyers responsibility

to marshal evidence in a full and fair fashion.

*Todd Burke is a commercial litigation partner in Gowling Lafleur Henderson LLPs Ottawa office. He isthe Leader of Gowlings U.S./Cross-Border Practice Group, the past Leader of the Commercial LitigationNational Practice Group and is the head of Gowlings Crisis Management Practice.Todd can be reached [email protected] or (613) 786-0226.** Jahmiah Ferdinand-Hodkin is a commercial litigation lawyer in Gowling Lafleur Henderson LLPsOttawa office.Jahmiah can be reached [email protected] (613) 786-0275.Todd and Jahmiah acknowledge and thank Jonathan Greenwald, articling student in Gowling LafleurHenderson LLPs Ottawa office, for his assistance in the preparation of this paper.

133Precious, supra note 67.

134Ibidat para 33.

Documents

Interim Relief in Complex Litigation