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 Act1 and, 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 intended proceeding, 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 Act and rule 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

R.S.O. 1990, c. C 43. Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 40. 3 Cellular 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)). 4 GEA Group AG v. Ventra Group Co. and Timothy Graham, 2009 ONCA 619 [Ventra]. 5 Alberta 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) [Leahy cited to ABQB].
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Page 3 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 intrusive and 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 requirements of ex 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 The specific

(a) (b) (c) (d) (e)

Whether the applicant provided sufficient evidence to raise a valid claim; Whether the applicant has shown that the third party was somehow involved in the wrong; Whether the third party is the only practicable source of information; Whether the third party could be indemnified should any harm come of the order, if granted; and 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 be established 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 legitimate objective, this requirement may be satisfied in various ways. The information sought may be needed to obtain the identity of a wrongdoer to evaluate whether a cause of action
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Ventra, supra note 4 at para 85. Price Defender Co. v. Trading Source Group Inc., [2009] O.J. No. 2258 at para 8 (Sup Ct J). 8 Leahy, supra note 5. 9 Ibid at para 106. 10 Ventra, supra note 4.

Page 4 exists to plead a known cause of action, to trace assets or to preserve evidence or property The crucial point is that the necessity for a Norwich order must be established on the facts of the given case to justify invocation of what is intended to be an exceptional, 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. (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 that they are suing to recover a loss of property (money) that they say the Defendants car manufacturers wrongfully extracted from them and other consumers and to make their case against the wrongdoers, the Plaintiffs absolutely need information from JATO, which in no way was a party, accessory, or accomplice to the Defendants wrongdoing. When I weigh the situation and the position of JATO, I note that it has valuable property that it has chosen not to provide to the Plaintiffs because JATO believes that doing so will harm its enterprises goodwill and JATO does not wish to be seen to be even indirectly harming
11 12

The respondent in the Norwich

application was JATO, a British company in the business of supplying automotive data to its customers

Ibid at para 91. Leahy, supra note 5. 13 Tetefsky v. General Motors Corp., 2010 ONSC 1675 [Telefsky].

Page 5 its clientele, who include the Defendants. I note also that JATO submits that it is has been a victim of wrongdoing because the Plaintiffs, through their witness Dr. Van Biesebroeck, have allegedly breached a contract and allegedly misappropriated JATOs intellectual property and used it for an unauthorized purpose. Thus, as I view it, the situation is one where for the greater good of a class proceeding, the Plaintiffs ask the court to expropriate JATOs property and also condone an alleged misappropriation of property. I do not think that it would be in the publics interest, where the courts have a vital role in protecting property and privacy interests, or in the interests of justice to grant the Plaintiffs 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 a discretion to be exercised on judicial principles.18

Ibid at paras 49-50. York 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 Ibid at 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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Page 6 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 contractingout 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 Brotherhood of 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 much clearer language than I find in the [Ontario Labour Relations Act] to strip this court of its very well-established inherent jurisdiction to grant an injunction when, in the exercise of discretion, 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 Robert 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. Canadian Pacific Inc., [1996] S.C.J. No. 42 at para 5 (SCC) [Brotherhood].
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Page 7 legislature, by the somewhat elliptical language of sections 98 and 114, has removed this Court'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 not previously 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 the trial in establishing his legal right to restrain the defendant from doing what he is threatening to do. If he should fail to do so the defendant may have suffered loss as a result of having been prevented from doing it while the interim injunction was in force; any loss is likely to be dammum absque unjuria for which he could not recover damages from the plaintiff at common law. So unless some other means is provided in this event for compensating 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. 2.

Is there a serious question to be tried? 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?

Deverell v. Toronto Star Newspaper Ltd., [2001] O.J. No. 945 at para 15 (Sup Ct J). Rules of Civil Procedure, supra note 2, r. 40.03. 26 F. 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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Page 8 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 extensive review of the merits. The first arises when the result of the interlocutory motion will in effect amount to a final determination of the action. This will be the case either when the right which the applicant seeks to protect can only be exercised immediately or not at all,

Cyanamid, supra note 20. Ibid. 32 Struik v. Dixie Lee Food Systems Ltd., [2006] O.J. No. 3269, 150 A.C.W.S. (3d) 700 (Ont Sup Ct J) citing Ausman v. Equitable Life Assurance Co. of Canada, [2002] O.J. No. 3066 (Ont Sup Ct J) at para. 17. 33 Ibid at para 35. 34 RJR, supra note 29 at para 44, citing Cyanamid. 35 RJR, supra note 29 at para 50. 36 See e.g. Spar Beca v. Spork, [2009] O.J. No. 1754, 176 A.C.W.S. (3d) 834 at para 25 (Sup Ct J).
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Page 9 or when the result of the application will impose such hardship on one party as to remove and 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. It is harm which either cannot be quantified in monetary terms or which cannot be cured, 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

RJR, supra note 29 at para 51. Ibid at para 59. 39 Centre Ice Ltd. v. National Hockey League (1994), 75 F.T.R. 240n at p 54. 40 Sharpe, supra note 19 at para 2.417. 41 Jet Print Inc. v. Cohen, [1999] O.J. No. 2864, 43 C.P.C (4th) 123 (Sup Ct J). 42 Fednav 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 RJR and has not been overturned. 43 Canadian Fracmaster Ltd. v. Trojan Wellhead Services, [1992] 40 C.P.R. (3d) 402 (FCTD). Please note that this decision precedes RJR, supra note 29, however, it has not been overturned.
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Page 10 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 question balanced, 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.

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Cyanamid, supra note 20 at p 408. Sharpe, supra note 19 at para 2.540. 46 Cyanamid, supra note 20 at p 408. 47 Grillo v. DAngela (2009), 306 D.L. R. (4th) 370 (Sup Ct J).

Page 11 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 of 10 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 and Anton Piller orders 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.

Gulf Islands Navigation Ltd. v. Seafarers International, [1959] B.C.J. No. 106 (SC). Robert Half Canada Inc. v. Jeewan (2004), 71 O.R. (3d) 650 at paras 36 and 38 (Sup Ct J). 50 Rules of Civil Procedure, supra note 2, r. 40.02. 51 Rules of Civil Procedure, supra note 2, r. 39.01(6). 52 Forestwood 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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Page 12 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 of Mareva injunctions as follows: Ex parte injunctions in general and Mareva injunctions in particular are often the bane of the judicial process. They present judges with the most vexing of issues on an immediate and urgent basis while simultaneously obliging the moving party to make full and frank disclosure 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 more severe circumstances than even with an execution after judgment, which may force the defendant 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. 2.

A strong prima facie case on the merits; 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 strong prima 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 facie case: The chambers judge used the test of good arguable cause. I do not consider that a strict formula should be applied. Whereas, the Supreme Court of Canada in Aetna appeared to favour strong prima facie case, that Court also appeared to leave considerable room for courts to frame the test as fits the nature of the case before them. Mooney No. 2. recognized both standards strong prima facie case and good arguable United 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 Chitel v. 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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Page 13 case, as formulations that have been used. I expect that the difference in words is a difference without practical consequence. In either case, it is more than an arguable case, and may be met by an assessment that does not reach the bound to succeed threshold.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 or the dissipating or disposing of them is for the purpose of avoiding judgment that a Mareva injunction should be issued. I think that this view is consistent with Estey J.s statement that the overriding consideration is the threat to defeat his adversary.58 Evidence of this purpose may be inferred where there is evidence of a strong prima 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
56 57

Ibid at para 54. Chitel, supra note 54 at 532-33. 58 R v. Consolidated Fastfrate Transport Inc., [1995] O.J. No. 1855 (CA). 59 663309 Ontario Inc. v. Bauman, [2000] O.J. No. 2674 at para 29 (Sup Ct J). 60 Royal Bank of Canada v. Boussoulas, 2010 ONSC 4650 at para 17 [Boussoulas]. 61 Ibid at para 18.

Page 14 refusal of the injunction62 or the dissolution of a granted Mareva injunction.63 In the 2010 Ontario Superior Court decision of Boussoulas, 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 conveniens test is discretionary. The real and substantial connection test involves a fact-specific inquiry, but the test ultimately rests upon legal principles of general application. The question is whether the forum can assume jurisdiction over the claims of plaintiffs in general against defendants in general given the sort of relationship between the case, the parties and the forum. By contrast, the forum non conveniens test is a discretionary test that focuses upon the particular facts of the parties and the case. The question is whether the forum should assert jurisdiction at the suit of this particular plaintiff against this 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) on consent 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

Ibid at para 21. Chitel, supra note 54 at 519, 523, 528; Yemec, supra note 53 at para 35. 64 Boussoulas, supra note 60 at paras 34-35. 65 Impulsora 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).
63

62

Page 15 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 simpliciter as originally set out in Muscutt74 and re-defined it as follows: First, the court must determine whether the claim falls under rule 17.0275 (excluding subrules (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 rule 17.02 is made out then the defendant bears the burden of showing that a real and substantial connection does not exist. If one of the connections is not made out the plaintiff bears the burden of showing that a real and substantial connection does exist.76

70 71

Brotherhood, supra note 23 at para 5. Channel Tunnel Group Ltd. v. Balfour Beatty, [1993] A.C. 334 (H.L.), cited in Brotherhood. 72 Tolofson v. Jensen; Lucas (Litigation Guardian of) v. Gagnon, [1994] 3 S.C.R. 1022 (SCC). 73 [2010] O.J. No. 402 (CA) [Van Breda]. 74 Muscutt, supra note 66. 75 Rules of Civil Procedure, supra note 2, r.17.02. 76 Van Breda, supra note 73 at para 109.

Page 16 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 of forum 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. 2.

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

Ibid at para 72. Ibid at paras 109 and 98. 79 Ibid at paras 84 and 109. 80 Amchem 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 Ibid at para 7.
78

77

Page 17 (b) Anton Piller The Anton Piller order, 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 Piller order 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 neglected aspect of drafting and carrying out an Anton Piller order, 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 an Anton Piller order. The following elements are essential:

1. 2.

the plaintiff must demonstrate a strong prima facie case; 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 award Anton Piller orders 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
83 84

Celanese Canada Inc. v. Murray Demolition Corp., [2006] 2 S.C.R. 189 at para 32 (SCC) [Celanese]. Sharpe, supra note 19 at para 2.1100. 85 Celanese, supra note 83. 86 Ibid at para 35.

Page 18 profession. For instance, in Celanese, evidence was seized which was privileged and that privilege was not protected in the execution of the Anton Piller injunction. As a result, the evidence was excluded and the plaintiffs solicitor was removed from the case. The Anton Piller order 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 Piller order 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 Piller orders. 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. 4.

The scope of the order should be no wider than necessary. Terms setting out procedures for dealing with confidential or privileged documents should be very clear.

5. 6.

The order should contain a limited use clause. 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. 2.

The order should provide that the search be commenced during normal business hours. 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.
87 88

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

Descoteaux v Mierzwinski, [1982] 1 S.C.R. 860 at p. 889 (SCC). Celanese, supra note 83 at para 40.

Page 19

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 the supervising solicitor. 89

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

1. 2. 3.

The supervising solicitors responsibilities continue beyond the search itself. The supervising solicitor should be required to file a report to the court describing the search. 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 Piller order. 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

Ibid. Ibid. 91 A precedent Order can be found at www.ontariocourts.on.ca/scj/en/commerciallist/index.htm 92 Grenzservice 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 assessing appropriate conduct. 93 Sharpe, supra note 19 at para 2.265. 94 Ibid.
90

89

Page 20 However, in Bell Expressvu Limited Partnership v. Morgan95, a 2008 Superior Court case, it was held that Anton Piller orders should not be set aside absent exceptional circumstances such as material nondisclosure or scandalous or abusive behaviour.96 V: Interim Preservation Orders Under Rule 45.02 of the Rules of Civil Procedure
97

a party may bring a motion for the interim

preservation of property. This order is sought to freeze 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. 2. 3.

that the party claims a right to a specific fund; that there is a serious issue to be tried regarding the party's claim to that fund; and 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 96

[2008] O.J No. 1144, 65 C.P.R (4th) 316 (Sup Ct J). Ibid at para 22. 97 Rules of Civil Procedure, supra note 2, r.45.02. 98 Stearns v. Scocchia, [2002] O.J. No. 4244, 118 A.C.W.S. (3d) 34 (Sup Ct J) [Stearns]. 99 Ibid at para 9. 100 DIRECTV Inc. v. Gillott (2007), 84 O.R. (3d) 595 (Sup Ct J). 101 Ibid at para 59.

Page 21 there is a stricter test required for a Mareva injunction and for good reason - it restrains the 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 to restrain a defendant from disposing of some or all of his assets before trial. In a motion under rule 45.02, the moving party claims a right to a specific fund and is seeking to have the 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 a means of satisfying a likely or probable judgment against the defendant. In contrast, the purpose of a motion under rule 45.02 is to protect a claimant who is asserting a specific proprietary claim to assets prior to trial. (c) The Test employed - case law supports the assertion that the threshold for an order under rule 45.02 is lower than that for a Mareva injunction. In the former, the moving party is required to show that there is a serious issue to be tried, while the party seeking a Mareva injunction must demonstrate a strong prima 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

102 103

Stearns, supra note 98 at para 12. Ibid at para 14. 104 Belajac v. Belajac, [2008] O.J. No. 1058, 166 A.C.W.S. (3d) 405 (Sup Ct J). 105 Ibid at para 42. 106 Ibid at para 43. 107 Ibid at para 44.

Page 22 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 property neither as a manager nor as a tenant and accordingly, he is ordered to deliver up vacant possession to the Estate. In addition, he is ordered to immediately deliver all of the books, records and personal property of the deceased to the Estate Trustee including the contents 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 timet injunctions 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 it prove its claim, the assessment of damages to which it would be entitled is any more formidable than it is in a spectrum of other cases where damages are routinely fixed by the 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

108 109

Ibid at para 54. Operation Dismantle Inc. v. Canada, [1985] 1 S.C.R. 441 (SCC). 110 Belron Canada Inc. v. TCG International Inc., 2009 BCSC 596. 111 Ibid at para 97. 112 Ibid at para 103. 113 Corp. of the Canadian Civil Liberties Assn. v. Toronto (City) Police Service, 2010 ONSC 3525.

Page 23 Project Director, Abby Deshman, its General Counsel, Nathalie Des Rosiers, and the Canadian Labour Congress, brought a quia timet motion 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 and helpful: While the test has been posed in terms of the temporal imminence of harm, it is submitted that this is not the only, or necessarily best, way to describe the analysis which is suggested by the results reached. What the court does look for is the information necessary to predict with confidence not only that the harm will occur but also other relevant circumstances which will then exist. In other words, the court must be satisfied that the relevant factors which bear upon the granting of injunctive relief have crystallized. Cases in which quia timet injunctions have been granted may be taken to suggest that the notion of crystallization is an appropriate way to describe the state of affairs the courts require before granting injunctive relief. [] The difficulties in predicting future conduct and future harm come to the fore most acutely during a court's consideration of the balance of convenience. As Justice Sharpe has written: A related matter is the weighing of the benefit the injunction confers on the plaintiff against the cost it imposes on the defendant. Again, this assessment 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 and the cost alleviating or avoiding that harm will impose upon the defendant. If the situation is still fluid or uncertain, an injunction granted prematurely may impose unjustified costs on the defendant and, of course, this is particularly 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

114 115

Ibid at paras 88 - 89. Ibid at para 89. 116 MacMillan Bloedel Ltd v. Simpson, [1996] 2 S.C.R. 1048 (SCC).

Page 24 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 an ultimate resolution of a legal issue between them. It is to get the court to articulate a proscriptive 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 decision preceded 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 Ibid at 36. 121 Ibid at 37. 122 Balshin, supra note 117. 123 Berryman, supra note 119. 124 2000 BCSC 150. 125 Ibid at para 41.

Page 25 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 exercised when invoking the power to enjoin foreign litigation." The bar has been set very high.126 The anti suit injunction 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 suit order: In the case of the stay the domestic court determines for itself whether in the circumstances it should take jurisdiction whereas, in the case of the injunction, it in effect determines 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

126 127

Ibid at para 2. Sharpe, supra note 19 at para 5.510. 128 Amchem, supra note 80. 129 Ibid at para 23. 130 Ibid at para 53. 131 Ibid at para 55. 132 Sharpe, supra note 19 at para 5.520.

Page 26 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 suit injunction 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 suit injunction 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 is the Leader of Gowlings U.S./Cross-Border Practice Group, the past Leader of the Commercial Litigation National Practice Group and is the head of Gowlings Crisis Management Practice. Todd can be reached at todd.burke@gowlings.com or (613) 786-0226. ** Jahmiah Ferdinand-Hodkin is a commercial litigation lawyer in Gowling Lafleur Henderson LLPs Ottawa office. Jahmiah can be reached at jahmiah.ferdinand-hodkin@gowlings.com or (613) 786-0275. Todd and Jahmiah acknowledge and thank Jonathan Greenwald, articling student in Gowling Lafleur Henderson LLPs Ottawa office, for his assistance in the preparation of this paper.

133 134

Precious, supra note 67. Ibid at para 33.