Generally, an injunction is a court order compelling a party to do something or stop something. They can arise in commercial litigation, in employment law, and in family law. This article will focus on commercial litigation and touch on employment law.
Injunctions are often sought very early in a dispute, and may be sought by the aggrieved party without notice to the affected party. Injunctions, especially restraining orders, are typically sought when a party fears they will suffer irreparable harm that can’t be repaired by monetary damages. Injunctions sought early in the dispute are typically temporary, with permanent injunctions typically available at the trial. Pre-trial injunctions can be time limited or can continue until the trial on the merits.
Commercial Injunctions and Restraining Orders
The two main types of injunctions are prohibitory injunctions, also called restraining orders, and mandatory injunctions. Prohibitory injunctions prevent a party from a specific act, while mandatory injunctions require a party to do something. As an example, if a landlord entered into a commercial lease agreement with a prospective tenant then got a better offer so attempted to cancel the first agreement and proceed with the second offer, the initial tenant could seek a prohibitory injunction restraining, or preventing, the landlord from renting the property to the second tenant and a mandatory injunction compelling the landlord to rent the property to them, the first tenant.
The general test for injunctions is set out in a 1995 Supreme Court of Canada Case, RJR-MacDonald Inc. v. Canada (Attorney General), [1995] 3 SCR 199: there must be a serious issue to be tried (also called a strong prima facie case), the applicant must suffer irreparable harm if the injunction is not granted, and the balance of convenience, or the weighing of prejudice, supports the injunction. In the commercial context, irreparable harm typically means damages would be an inadequate remedy. In the example of the landlord renting out commercial space twice, the court would likely consider whether the property in question is unique in some way. The weighing of prejudice addresses who will suffer more: the applicant if the injunction isn’t granted, or the other party if the injunction is granted. As such, mandatory injunctions compelling a party to do something before a trial on the merits are harder than prohibitory injunctions preventing a party to do something. In the example above, the restraining order preventing the landlord to rent with someone else would be easier to get than an order compelling the landlord to immediately honour the initial lease.
In commercial litigation, parties may need to take steps to preserve the assets in issue. The aggrieved party can seek a Mareva injunction, which freezes the defendant’s assets pending determination of the matter. In addition to the standard test to obtain an injunction, the applicant must prove the defendant has assets that could be moved or hidden. This application is often done without notice, to avoid giving the defendant the opportunity to hide their assets before restrained from doing so, and is often served on the banks etc. holding the assets in question.
There are other special types of restraining orders. For instance, it is possible to bring an anti-suit injunction, which is a restraining order that prevents a party from bringing parallel litigation in another jurisdiction. Supreme Court of Canada caselaw (Anchem Products Inc. v. British Columbia (Workers’ Compensation Board) 1993 CanLII 124 and Chevron Corp v. Yaiguaje 2015 SCC 42) strongly encourages applicants to bring a stay application in the foreign court before bringing an anti-suit in Canada; BC judges have interpreted that as a strong preference but not an absolute requirement. Another special type of restraining order is a quia timet order, which is an order restraining threatened or imminent wrongful acts which have not yet commenced. The applicant must prove a strong probability the feared conduct will occur and cause damage in addition to the standard elements to obtain an injunction.
Employment Law Injunctions and Restraining Orders
In employment law, employment contracts may contain restrictive covenants including non-disclosure agreements, non-solicitation agreements, and non-compete agreements. Typically, these agreements continue past the termination of employment. If an employee breaches any of these restrictive covenants, the employer may seek a prohibitory injunction or restraining order preventing the employee from the behaviour breaching the restrictive covenant. The same test would apply, and employers must be mindful the court is generally wary of restraining trade. You can read more about restrictive covenants in our article, Everything you need to know about employment agreements, under employment law or you can consult one of our employment lawyers.
Family law Injunctions and Restraining Orders
The topic of injunctions and restraining orders in family law is quite complicated and beyond the scope of this article. The Family Law Act has provisions for protection orders, for instance, provisions for protection of property, and provisions for interim guardianship, primary residence, support payments, and exclusive occupancy of the family home. If you have questions about these topics, please contact one of our family law practitioners!
Conclusion
Restraining orders and other types of injunctions are available in many types of claims, especially commercial litigation, to restrain parties from doing irreparable harm to others and to protect parties’ rights where monetary damages won’t suffice. They are rare, and they are difficult. In almost all cases you will need to prove a serious triable issue, the risk of irreparable harm to you, and a lower risk of irreparable harm to the restrained parties. If you are worried about irreparable harm being done to your business by someone you think you have a legal claim against, you should contact one of our commercial trial lawyers. And you should proceed quickly – as failure to act in time could allow the irreparable harm to occur and could prejudice your argument the potential harm is irreparable.
In short, if you think you may need an injunction or restraining order in Vancouver, New Westminster, and throughout British Columbia, you should contact Ken Armstrong KC to discuss your options! Book a consultation today.