September 28 2015

As an international trade and litigation lawyer, I represent many companies located outside Canada and appear frequently on their behalf at Canadian courts and tribunals. It is common knowledge that litigation, especially complex litigation involving millions of dollars, can take years to complete. Sometimes, one party will bring a motion for an interlocutory injunction to stay or speed up some part of the proceedings and obtain a favourable outcome earlier on.

In English: parties can, sometimes, ask the Court to “speed things up” by getting a temporary ruling, giving them a favourable position vis-à-vis the other side.

This tactic is not very common in commercial litigation because it is quite extreme – you are basically asking the court to temporarily rule in your favour without actually having completely proven your case. If you are successful, your interlocutory injunction will have the immediate effect of preventing the other side from doing what it wanted to do, or stopping it from doing what it wanted to do. Because of this, you need to ensure that you have a very strong case, otherwise the cost of losing can be quite high.

In order to be successful, you need to prove three things to the court, as established by the Supreme Court of Canada’s decision in RJR-MacDonald Inc. v Canada (Attorney General), [1994] 1 SCR 311:

    1. You must prove that there is a serious issue before the court;
    1. You must prove that, if the interlocutory injunction is not granted, you will suffer irreparable harm; and
    1. You must prove that, on the balance of convenience, it is better to obtain an interlocutory injunction than to “wait it out” until trial.

Two weeks ago, I successfully defended one of my international business clients against such an interlocutory injunction brought forth by a Canadian company, see: Prudential Steel ULC et al v Attorney General of Canada et al, 2015 FC 1077.

The case itself is still ongoing and involves complex and detailed analysis of the Special Import Measures Act RSC 1985, c. S-15, the Special Import Measures Regulations, previous determinations by the Canada Border Services Agency (the “CBSA”), and a decision by the Canadian International Trade Tribunal. Basically, at issue in this case is whether or not the CBSA correctly started a re-investigation into the normal values of prices of subject Oil Country Tubular Goods (OCTG) imported into Canada from various countries around the world – including from India which is where my client is headquartered.

 Since this case is ongoing, I will not be writing on the merits until it is completed. This article only focuses on the procedural aspect of bringing an interlocutory injunction, which can be used in any type of civil or commercial litigation.

In this case, the Applicants brought an interlocutory injunction to stop the CBSA from continuing the re-investigation until this case had been heard by the Courts. But, by doing so, they were basically asking the Federal Court to make a premature decision right now in order to get what they wanted down the road. Practically speaking, if the Applicants were successful in stopping the CBSA from continuing, then they would already have their judgment, and the Respondents, including my client, would have to spend the rest of the litigation fighting against this temporary judgment.

The Honourable Mr. Justice Hughes agreed with me and the rest of the Respondents that the Applicants’ motion for an interlocutory injunction should be dismissed. Relying on the widely accepted analysis of the Supreme Court of Canada in RJR-MacDonald, he determined that:

    1. There was no serious issue at hand because, among other things, the CBSA’s re-investigation does not affect any legal rights or impose any legal obligations. Legal rights or obligations are only affected when a re-determination is made based on the outcome of the re-investigation.
    1. Justice Hughes correctly pointed out that the Applicants had failed to provide any evidence in respect of irreparable harm, only lawyers’ submissions. The Federal Court of Appeal had previously held that general assertions cannot establish irreparable harm and that assumptions, speculations, hypotheticals and arguable assertions unsupported by evidence carry no weight.
    1. Finally, in terms of balance of convenience, the Applicants provided no evidence to support any of their assertions that the balance of convenience favoured the granting of a stay.

In conclusion, the Applicants failed to establish on the three part RJR-MacDonald test that they should be granted an interlocutory injunction. Not only was their motion dismissed, but they were ordered to pay each Respondent, including my client, $2,500.00 in legal fees.

Finally, if you are embroiled in a long and complex litigation, it might make sense to ask the court for an interlocutory injunction – but only if you are able to successfully prove all three elements in the RJR-MacDonald analysis that was established by the Supreme Court of Canada.

This article is for informational purposes only and does not constitute legal advice. If you wish to seek legal advice, contact us today.  613-747-2459