Written by Jim Schmidt
Courts in British Columbia continue to struggle with when a pre-trial injunction should be issued to protect commercial interests. One aspect of this concerns the existence of evidence necessary to show that damage to an ongoing business amounts to irreparable harm. Another concerns the correct formulation of the test for granting a pre-trial injunction: is irreparable harm a free-standing requirement or is it part of a larger requirement that the "balance of convenience" favour the granting of the injunction?
Very recently, in Vancouver Aquarium Marine Science Centre v. Charbonneau, 2017 BCCA 395, a division of the B.C. Court of Appeal addressed each of these points. In the result, the Court reversed a lower court's decision to grant an injunction to the plaintiff, who alleged copyright infringement and breach of contract by the defendants.
On the first of these points arising for consideration—the sufficiency of evidence—the Court made it clear that for a pre-trial injunction to granted, "there … must be a foundation, beyond mere speculation" that irreparable harm will be suffered by the plaintiff. The Court criticized the affidavit evidence that supported the pre-trial application granted by the lower court. That evidence was encapsulated in an assertion that the defendants were harming the plaintiff in a way that was "impossible to calculate or repair". In the Court's view, there was not a "shred of evidence" to support the conclusion expressed in the affidavit. Indeed, the Court indicated that evidence of actual financial loss should have been articulated in the affidavit.
On the second point—the correct test—the Court's judgment questioned whether irreparable harm should be an independent requirement for a pre-trial injunction. Significantly, two of the three appeal judges took the view that the absence of irreparable harm should not necessarily prevent the issuance of a pre-trial injunction where the result of "balancing the interests of justice" favours an injunction.
This judgment came despite that the Supreme Court of Canada has, in two cases, including Google Inc. v. Equustek Solutions Inc., 2017 SCC 34, identified the test for a pre-trial injunction as including three primary, and separate, components:
- whether the plaintiff has raised a serious issue;
- whether the plaintiff will suffer irreparable harm if the injunction is not granted; and
- whether the balance of convenience favours the granting of the injunction.
Looking Forward
The B.C. Court of Appeal's endorsement of a stricter evidentiary standard for pre-trial injunctions is supported by decisions of other Canadian courts. However, the question of how much evidence is enough will likely have to be answered by lower courts hearing injunction applications in different contexts.
At the same time, the Court of Appeal's statements concerning whether irreparable harm is an independent requirement for a pre-trial injunction are more controversial and will likely cause continued uncertainty about the test lower courts should apply.
Bennett Jones