CANADA Law and Practice Contributed by: Craig Ferris KC, Marko Vesely, Shannon Hayes and Codie Chisholm, Lawson Lundell LLP
may insert a comeback clause or other provi- sion in the order that allows the affected party to return to court to have the injunction set aside or reheard on a complete record. 6.4 Liability for Damages for the Applicant A party may be held liable in damages for obtain- ing an injunction that is later discharged. As a condition of granting any non-permanent injunc- tion, the court may require the moving party to provide an undertaking as to damages or post security with the court for any damage that may be suffered by the responding party if the injunc- tion is later discharged. 6.5 Respondent’s Worldwide Assets and Injunctive Relief Worldwide Mareva injunctions may be granted to freeze the assets of a party where the court maintains jurisdiction over that party on a pre- trial basis. Mareva injunctions may be provided for in statute or at common law. The common law test in some jurisdictions in Canada may be more flexible than in others, but generally the moving party should establish: • a strong case for trial; • irreparable harm should the injunction not be granted; and • that the balance of convenience favours the moving party. The court will also consider whether there has been full and frank disclosure by the moving party; the particulars of the claim; whether the responding party has assets within the jurisdic- tion; and the risk of the responding party remov- ing or dissipating these assets in order to frus- trate judgment.
A strong case of fraud will also assist the moving party in establishing the risk of removal or dis- sipation of assets to frustrate judgment. The moving party will also be required to post an undertaking for damages and perhaps even security for the payment of those damages. 6.6 Third Parties and Injunctive Relief The rights of third parties may be impacted by Mareva injunctions. Mareva injunctions typically request the assistance of banks and other third parties who may have property of the respond- ing party in their possession. Third parties with notice of the injunction order will be required to comply with its terms. As a term of the order, the court will likely require the moving party to compensate these third parties for any reasonable expenses incurred in complying with the terms of the injunction order. 6.7 Consequences of a Respondent’s Non-compliance Injunctions are enforced through contempt of court. If a party fails to comply with an injunc- tion, the party will be required to appear before the court to show cause for why they should not be held in contempt of court. There are specific procedures that the moving party must follow when an order for contempt is sought. After hearing from the parties, the court may allow the offending party to purge their contempt by complying with the order within a certain peri- od of time, or the court may impose a penalty such as a fine or imprisonment. The court has wide jurisdiction to fashion a remedy to address the seriousness of the contempt.
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