As the court noted, “the appeal is focused on three discrete legal issues: a) Does a Supreme Court judge have jurisdiction to grant an interim injunction in the federal labour relations context before the appointment of an arbitrator? b) If an injunction is available, must it end the day an arbitrator is appointed? c) Is a judge obliged to require an undertaking as to damages?”

On the first issue, the court confirmed that the jurisdiction exists and affirmed the chambers judge’s decision on its availability in this case:

[24]      The parties agree that in the federal labour relations context, superior courts retain a residual discretionary power to grant interlocutory relief where an adequate alternative remedy is not available. This power emanates from the courts’ inherent jurisdiction and in British Columbia, it finds form in the Law and Equity Act, R.S.B.C. 1996, c. 253. . . .

[25]       The Supreme Court of Canada affirmed the existence of a residual discretionary power in Canadian Pacific. . . 

[26]       Although the parties agree on the existence of this power, they disagree on whether the power was available in the circumstances of this case. . . .

[32]      I agree with the judge that because the collective agreement at issue here allows for delay between the filing of a grievance and the appointment of an arbitrator, there is a remedial gap within the meaning of Canadian Pacific and the Supreme Court had jurisdiction to grant interim relief exercising its residual discretionary power. The plain fact is that until an arbitrator was in place, there was no tribunal in existence and available to the Union under the collective agreement or the statutory scheme that could grant the relief sought. As found by the judge, the Union’s affected members were facing the prospect of irreparable harm, and a forum was necessary to address that issue. With this practical reality, I do not find P.S.A.C. [2000 YTSC 20] (cited by TELUS) persuasive. It is unclear whether an arbitrator was in place at the time the bargaining agent in P.S.A.C. filed its application for interim relief; in any event, that decision is not binding on this Court.

[33]      TELUS is correct to point out that s. 60(1)(a.2) of the Canada Labour Code filled the specific void identified in Canadian Pacific, namely, a factual scenario in which neither the collective agreement nor the “machinery provided under the Canada Labour Code” offered a jurisdictional path to secure the postponement of intended job changes: at para. 6. However, it is also the case that Canadian Pacific stands for a broader proposition. It holds that where there is a “possibility” events will produce a difficulty not foreseen by the collective agreement and the statutory scheme that govern a labour relations relationship. . . .

[34]        In this case, the only “tribunal capable of resolving the matter” of irreparable harm at the time of the injunction application was the Supreme Court.

On the second and third issues, the court declined to reverse what were, in essence, discretionary decisions made by the chambers judge:

[39]      However, crafting the terms of an injunction involves discretion and I would not find that standing alone, the two-month expiry date justifies appellate intervention. It is readily apparent the judge was alive to the interim nature of the remedy he granted, recognized that once an arbitrator was in place, the latter was the decision maker with “domain” over injunctive relief and TELUS could raise the issue with the arbitrator, and he included terms allowing for an amendment or earlier termination of the injunction by written agreement or a further court order: at paras. 55–60. This flexibility provided for the amelioration of prejudice at TELUS’ behest.

***

[46]      The judge’s discretionary decision to not require an undertaking attracts a deferential standard of review and cannot be overturned in the absence of TELUS establishing a material error of law or principle, or a palpable and overriding error of fact: Interfor Corporation v. Mackenzie Sawmill Ltd., 2022 BCCA 228 at para. 26.

[47]      In my view, TELUS has not met this burden. The fact that another judge may have exercised their discretion differently does not mean this judge erred. On a functional and contextual review of the reasons for judgment, I am satisfied the judge did not misdirect himself on the law surrounding undertakings, misapprehend the record, fail to consider relevant factors, or wrongly emphasize one factor over another. Instead, as I interpret his reasons, he simply concluded that given the short duration of the interim injunction, the ability of TELUS to challenge the need for an injunction once before the arbitrator, and his direction that the proceedings be expedited, the usual approach taken to undertakings in the labour relations realm (a relevant consideration) was also appropriate here. This was an individualized assessment and TELUS has not displaced the deferential standard of review.

In the result, the appeal was dismissed.

The post Injunction available to fill remedial gap in labour case: BC Court of Appeal first appeared on British Columbia Law Institute.

The underlying dispute involved unauthorized construction due to failure to obtain building permits. The court’s consideration of whether to grant the city an injunction began with the issue of whether the respondent property owners were in breach of the city’s building bylaws:

[55]      In considering whether to grant the relief sought on an application for a permanent statutory injunction, the court must determine whether the respondents have breached the statutes or the regulations or orders made under the statute: Vancouver Island Health Authority v. Giannikos, 2021 BCSC 957 paras. 54–57. I will start with that analysis.

[56]      Pursuant to ss. 8(3)(l) and 53(2) of the Community Charter, S.B.C. 2003, c. 26, the City may, by bylaw, regulate, prohibit, and impose requirements in relation to buildings and structures for the health, safety and protection of persons and property. Pursuant to s. 298 (1)(a) of the Local Government Act, R.S.B.C. 2015, c. 1, the City is authorized to regulate the constructions, alteration, repair or demolition of buildings and other structures.

[57]      The City has adopted the City of Surrey, Bylaw No. 17850, Surrey Building Bylaw, 2012 (14 January 2013) [Building Bylaws] for that purpose. [Bracketed text in original.]

After a lengthy review of the facts and the relevant bylaws, the court found numerous breaches.

Having established this breach of the bylaws, the court turned to consider the remedy of an injunction under section 274 of the Community Charter:

[86]      As proceedings under s. 274(1) are statutory injunctions, the court should only refuse to enforce the legislative requirements in exceptional circumstances: Surrey (City) v. Sidhu, 2023 BCSC 1837 [Sidhu] at para. 29, citing North Pender Island Local Trust Committee v. Conconi, 2010 BCCA 494 [North Pender Island] at para. 38.

[87]      Unlike the test for the granting of a common law injunction, the test for granting statutory injunctions does not require that an applicant prove irreparable harm nor does the court have to assess the balance of convenience as between the parties. Rather, an application for a statutory injunction engages the public interest in seeing that a public statute is given effect:  Abbotsford (City) v. Weeds Glass & Gifts Ltd., 2016 BCSC 135 at paras. 20–22, citing North Pender Island at paras. 37–38.

[88]      While the Court has discretion to refuse the injunction, the discretion is narrow and should only be granted in exceptional circumstances: Sidhu at para. 30, citing Burnaby (City) v. Pocrnic, 1999 BCCA 652 at para. 15. [Bracketed text in original.]

In the end, the court concluded that the exceptional circumstances needed to deny the injunction weren’t present in this case:

[95]      In any event, to the extent that the demolition may cause hardship or inconvenience, that will not outweigh that public interest in having the law obeyed: Maple Ridge (District) v. Thornhill Aggregates Ltd. (1998), 54 B.C.L.R. (3d) 155 at para. 9, 1998 CanLII 6446 (B.C.C.A.).

[96]      No exceptional circumstances exist to justify the exercise of the Court’s discretion to refuse the injunction sought. Having found that the respondents have breached the Building Bylaws in the manner set out above, the injunction sought by the City is granted.

The post BC Supreme Court grants statutory injunction in construction dispute first appeared on British Columbia Law Institute.

After dealing with requests for “a declaration of ownership and vacant possession”, the court found that “The only question remaining is whether the Applicant is entitled to an injunction with respect to the Respondent (and other inhabitants) and the Property”.

The main issue this question placed before the court was “what test applies to a request for a permanent injunction”. As the court noted, there is a well-developed three-stage test for a pre-trial injunction, but that test “is clearly aimed at a proceeding where the issues between the parties are serious, but not yet determined”, which was not the case here.

After a brief review of decisions from courts outside New Brunswick, the court concluded that “At present it appears that there is no settled test for a permanent injunction”. So “In the absence of one, I find the questions articulated in NunatuKavut Community Council Inc. v. Nalcor Energy to be appropriate. They are consistent with the test in Cambie Surgeries Corp. v. British Columbia (Medical Services Commission), which has been adopted by other members of this Court, and provide a useful analytic framework”.

The court applied this six-stage framework to the findings made in this case as follows:

a.      Has the claimant proven that all the elements of a cause of action have been established or threatened? Yes, RBC has been successful with respect to its request for a declaration of ownership and vacant possession.

b.        Has the claimant established to the satisfaction of the court that the wrong(s) that have been proven are sufficiently likely to occur or recur in the future that it is appropriate for the court to exercise the equitable jurisdiction of the court to grant an injunction? Yes, the Respondent has lived on the Property for over a year since the sale of the property and the demand to leave. He has resisted not by court action or response but by refusal to leave. This has necessitated court action.

c.      Is there an adequate alternate remedy, other than an injunction, that will provide reasonably sufficient protection against the threat of the continued occurrence of the wrong? There is no adequate alternate remedy that I can envision that will provide the protection sought.

d.       If not, are there any applicable equitable discretionary considerations (such as clean hands, laches, acquiescence or hardship) affecting the claimant’s prima facie entitlement to an injunction that would justify nevertheless denying that remedy? No, there is nothing in the conduct of RBC that implicates them in any equitable consideration in favour of the Respondent.

e.      If not (or the identified discretionary considerations are not sufficient to justify denial of the remedy), are there any terms that should be imposed on the claimant as a condition of being granted the injunction?  No, there are no such terms necessary.

f.        In any event, where an injunction has been determined to be justified, what should the scope of the terms of the injunction be so as to ensure that only actions or persons are enjoined that are necessary to provide an adequate remedy for the wrong that has been proven or threatened or to effect compliance with its intent? Yes. While the relief sought is appropriate with respect to the Respondent, RBC has sought to extend the injunction to “any other inhabitants”. There is no evidence before me that they are other inhabitants than the Respondent. As such the terms of the injunction should be narrowed so as to be restricted only to the Respondent.

In the result, the court decided to grant the requested injunction “on the terms as narrowed”.

The post New Brunswick court grapples with test for permanent injunction first appeared on British Columbia Law Institute.

“In essence”, the court explained, “the Plaintiffs raise two sets of claims against the Defendants. KWR’s claims concern the Defendants’ alleged breach of the restrictive covenants contained in their license agreements with KWR. . . . KWR argues that the operation of the Defendants’ new brokerages under the aegis of a competing real estate franchisor breaches various contractual terms between the parties. KWR claims that the breached contractual terms include the restrictive covenants contained in their license agreements”.

The plaintiffs were seeking a pre-trial injunction against the defendants, and the court accepted the defendants’ argument that “because the relief requested amounts to a mandatory injunction, the first arm of the RJR-MacDonald test should require a higher standard of proof than a serious issue to be tried. It should require proof of a strong prima facie case”.

After an extensive review of the merits of the plaintiffs’ case and the leading authorities, the court found that “there is a strong prima facie case that the restrictive covenants in the License Agreements are both reasonable and enforceable against the Defendants. Further, the Defendants have breached those terms by joining a competing real estate franchise during the term of the License Agreements. Accordingly, there is a strong likelihood that the Plaintiffs will succeed in this proceeding following trial”.

The court also found that the plaintiffs had met the second element of the test:

From the law and the evidence before me, I find that KWR will suffer irreparable harm if an injunction were not granted. I say this because:

1.   The loss of two major franchises in two major markets, with the loss of about six hundred agents, all to a larger direct competitor, causes great harm to KWR.

2.   That harm would be compounded by the anticipated reaction of other KWR franchisees if this motion were denied. Those franchisees would learn that the restrictive covenants in their license agreements, which both bind them to KWR and protect them from KWR competitors, are of little value. That would most likely shrink the goodwill and ultimately, the value of the KWR system in Canada.

3.   Moreover, the Defendants’ breaches of the License Agreements would likely significantly set back any KWR replacement franchises in the applicable Ottawa and Mississauga territories. In addition to lost goodwill and market share, those replacement franchises would be faced with having to compete with former KWR franchises in those same territories

After a brief review of the third element, the court concluded that “the balance of convenience tilts towards the Plaintiffs”.

Finally, the defendants argued that the plaintiffs weren’t entitled to the injunction because they came to the court with unclean hands. The court dismissed this argument in short order:

Undoubtedly, inasmuch as the Plaintiffs seek to obtain equitable relief in the form of an injunction, the clean hands doctrine applies. But I have not found that KWR engaged in any improprieties regarding the Defendants which would cause me to invoke the clean hands doctrine to deny to the Plaintiffs the relief they seek.

The post Ontario court orders mandatory injunction in franchise dispute first appeared on British Columbia Law Institute.

The court began by noting that “The decision to grant an interlocutory injunction is discretionary and entitled to a high degree of deference. This Court may not interfere solely because it would have exercised the discretion differently. Intervention will be justified, however, where the chambers judge proceeded ‘on a misunderstanding of the law’: CBC at para 27; Google Inc v Equustek Solutions Inc, 2017 SCC 34 at para 22”. Further, “The chambers judge identified the three branches of the test for a mandatory interlocutory injunction correctly. The applicant must demonstrate: a) a strong prima facie case; b) irreparable harm if the relief is not granted; and c) the balance of convenience favours granting the injunction: CBC at para 18; Avmax Aircraft Leasing Inc v Air X Charter Limited, 2022 ABCA 252 at para 69.”

But the court found errors in the application of this test. In particular, the court was concerned about the chambers judge’s handling of the first element:

[18]           Needless to say, the application did not proceed as a trial would have done. The parties’ materials and submissions were relatively brief; they prevented the chambers judge from undertaking the “extensive review of the merits” required when considering a mandatory injunction: CBC at para 15. . . .

[20]           The finding of transfers below market value should not have been the end of the inquiry. As noted, a strong prima facie case will be found where there is a “strong likelihood on the law and the evidence presented that, at trial,” the respondent will “be ultimately successful in proving the allegations” set out in his claim: CBC at paras 17-18. Those allegations include that the transfers were made by the mother in breach of trust, the appellant was unjustly enriched, and the appellant accepted the transfers as a trustee. The parties, and therefore the chambers judge, did not address whether there was a breach of trust in any detail.

[21]           Even assuming a strong prima facie case of breach of trust could be established, the chambers judge did not consider how a breach of trust by the mother would make the appellant liable for return of the transferred properties. At the time of the transfers, the appellant was not a trustee. A stranger to a trust can be held liable as a constructive trustee for breach of trust in some circumstances—for example, if the stranger is found to be a trustee de son tort, to have knowingly assisted in a fraudulent and dishonest design, or to have knowingly received the property where there is constructive or actual knowledge of the breach: Citadel General Assurance Co v Lloyds Bank Canada, 1997 CanLII 334 (SCC), [1997] 3 SCR 805 at paras 19-25, 48-51, 1997 CanLII 334 (SCC); Paul First Nation v K & R 2014 Inc, 2021 ABQB 32 at paras 67-68. On the materials available to us, it appears there was no argument as to whether or how the appellant was liable as alleged. The result is that the chambers judge did not consider, and was not equipped to consider, whether there was a strong prima facie case any of these or other bases for liability were made out.

[22]           In addition to arguments based on the terms of the trust deed, the respondent pointed to the fact the mother’s caveats remain on title from 2003 as support for his position that the lands were still “owned beneficially for the trust”; he argued they would have been removed if the transactions were intended to transfer beneficial ownership to the appellant. The appellant responded that the intent, if any, behind the failure to remove the caveats could only be determined on evidence that was not before the court, such as evidence from the lawyer who assisted with the transfers.

[23]           The chambers judge placed weight on the presence of the caveats in concluding the appellant had established a strong prima facie case. However, a caveat only provides notice of a claim to an interest in land, it does not establish the validity of the claim: St Pierre v North Alberta Land Registry District (Registrar), 2023 ABCA 153 at para 8, citing St Pierre v Schenk, 2020 ABCA 382 at paras 30-31. . . . Given the inconsistency between the transfer documents and the historically registered caveat, and without any other evidence, the respondent did not establish that the mother’s failure to remove the caveat was intentional. The existence of the caveat is not capable, on its own, of establishing a “strong likelihood” the respondent will be successful in proving the allegations set out in his statement of claim.

The court also had concerns regarding the second element of the test:

[24]           The chambers judge also committed reviewable error in assessing irreparable harm. Generally, irreparable harm refers to harm that either cannot be quantified in monetary terms or that cannot be cured, for example where one party will not be able to collect damages from the other: RJR-MacDonald Inc v Canada (Attorney General), [1994] 1 SCR 311 at 341, 1994 CanLII 117 (SCC). An applicant bears the onus of demonstrating irreparable harm with evidence that is clear and not speculative: Modry v Alberta Health Services, 2015 ABCA 265 at para 82.

***

[27]           The respondent also argued the trust would suffer losses because the appellant was not paying it rent for her use of the land, was not collecting or remitting payments on certain surface leases, and might be dilatory in renewing expiring leases. The respondent characterized these losses as unquantifiable, giving rise to irreparable harm.

[28]           The chambers judge appeared to accept this argument, holding that irreparable harm had been established because “potential harm to the beneficiaries goes beyond the amounts that could be quantified on the basis of [the appellant’s] past use of the land and . . . extends into the future in the form of unquantifiable losses”. Any loss of rent or surface lease income, present or future, is quantifiable; the fact it has not yet been incurred does not make it unquantifiable and therefore irreparable. It does not constitute harm that “cannot be quantified in monetary terms or which cannot be cured”: RJR at 341.

***

[30]           As noted by this Court in Lubicon Lake Band v Norcen Energy Resources Ltd, 1985 ABCA 12 at para 33, the “irreparable harm” criterion serves to remind courts and litigants of the extraordinary nature of granting injunctive relief on an interlocutory basis: “an interim injunction is emergent relief. The claimant seeks a remedy without proof of his claim. This inversion should only be considered in cases where the harm is of such seriousness and of such a nature that any redress available after trial would not be fair or reasonable. This hurdle must be met before the balance of convenience is weighed”. The chambers judge erred by misinterpreting the irreparable harm requirement.

Finally, the court came to the following conclusion regarding the injunction:

[32]           It is open to us to consider afresh whether an injunction should be granted. As noted, the evidence was incapable of establishing irreparable harm. In these circumstances, this is a sufficient basis on which to deny the injunction. It is therefore not necessary to consider afresh the strength of the case and the balance of convenience.

[33]           Beyond the three parts of the test, the “fundamental question is whether the granting of an injunction is just and equitable in all of the circumstances of the case”: Google at para 25. The relief the respondent sought in the application below was the same as the core elements of the relief he sought in his statement of claim, albeit on an interim basis. While a plaintiff might be entitled to such relief before proving his claim in some circumstances, the respondent did not establish any basis on which granting such an inversion would be just and equitable in the circumstances of this case.

[34]           We conclude that granting a mandatory injunction on an interlocutory basis is not just and equitable in the circumstances of this case.

The post Alberta Court of Appeal overturns mandatory injunction to transfer land first appeared on British Columbia Law Institute.