Injunctions - Case Summaries
The database contains 7 case summaries relating to Injunctions. The summaries are sorted in reverse date order with 20 summaries per page. If there are more than 20 summaries, use the navigation links at the bottom of the page.
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Injunctions – Security for Release from Arrest – Letters of Credit – Fraud
Olsen v. The Bank of Nova Scotia, 2011 BCSC 111
This was an application for an injunction restraining payment under a letter of credit. The letter of credit had been issued to obtain the release of a vessel from arrest and to secure claims that were the subject of arbitration. The arbitrations were decided in favour of the defendant ship builders and applications to review the arbitration awards were later dismissed. In this action the plaintiff alleged that the letter of credit was obtained by fraud. The plaintiff was not a party to the ship building contract but was to be the ultimate purchaser and had supplied the letter of credit as well as the funds to finance the construction. The Court dismissed the application holding that the plaintiff had failed to make out a strong prima facie case of fraud. The Court also disagreed with the plaintiff that an injunction was necessary to preserve the status quo. The Court noted that the defendants had the security of the vessel and agreed to release the vessel in substitution for the security of the letter of credit. The Court said that by seeking to invalidate the letter of credit and not returning the vessel the plaintiff “will have significantly altered the position of” the defendants. The Court was finally concerned that the action was simply a collateral attack on the arbitration awards.
Anti-Suit Injunction - Bunker Supplies
Alpha Trading Monaco Sam v. Sarah Desgagnés (Ship), 2010 FC 695,
This was an application by the defendant owner of the subject ship for an anti-suit injunction restraining the plaintiff from continuing proceedings commenced in Belgium. The plaintiff was a bunker supplier who had supplied the defendant ship with bunkers at various ports including ports in Canada. The ship was under time charter at the time of the supplies and the time charter contained a prohibition of lien clause and a clause that charterers were responsible for bunkers. The ship was arrested by the plaintiff in this action in Montreal and was later released on the undertaking of the owner to provide bail. Before bail was actually provided, the plaintiff advised that it would amend its statement of claim and proceed with only one supply claim. The plaintiff later commenced proceedings in Italy and Belgium and had the vessel seized in Belgium. The Court noted that the reason the plaintiff was “slicing and dicing” its recovery efforts was because Canadian law required personal liability on the part of the ship owner to support an action in rem whereas under Belgium law a ship may be arrested to secure a claim by a bunker supplier without personal liability of the owner. The Court further noted that the discretion to order an anti-suit injunction should be exercised most carefully. However, the Court did exercise its discretion and granted the injunction on the basis that the plaintiff had commenced these proceedings and accepted the defendant‟s undertaking to post bail. Importantly, the Court said that if the plaintiff had not commenced this proceeding in the first instance the defendants would have no standing whatsoever to bring this motion. The Court noted that the plaintiffs could properly have made their claims in a number of jurisdictions but that having made its choice it would be held to it. Accordingly, the Court granted the anti-suit injunction and ordered the plaintiff to release the ship from arrest in Belgium. On appeal to the Federal Court of Appeal, the Court of Appeal in brief reasons merely said that the re-arrest of the ship was, in the circumstances, an attempt to take unfair advantage by forcing the owners to provide security to guarantee a judgment against a third party.
Mareva Injunction – Charters
Aosta Shipping Co. v. Gulf Overseas General Trading LLC, 2007 BCSC 354
This was an application to set aside a mareva injunction that had been granted ex parte. The injunction seized bunker fuel on board a ship that was chartered by the Defendant. The Plaintiff’s claim against the Defendant was in relation to a freight dispute in an earlier unrelated charter and which had been submitted to arbitration in England. The Court noted that mareva injunctions are “extraordinary orders” and their granting is discretionary. In particular, it noted that in British Columbia the authorities indicated a more relaxed approach to mareva injunctions with a movement “to a somewhat unfettered exercise of discretion”. Nevertheless, the two necessary conditions for the granting of an injunction are that the Plaintiff must show a strong prima facie or good arguable case and that the balance of justice and convenience favours the granting of the injunction. Although it was apparently clear that the Defendant owed the Plaintiff the money, the Court set aside the injunction on the grounds that neither party had a substantial connection to the jurisdiction and the seizure had negative consequences for the ship, which was owned by a third party, and her crew.
Interlocutory Injunctions – Mareva Injunction – Breach of Charter Party
Front Carriers Ltd. v. Atlantic & Orient Shipping Corporation, 2006 FC 18
This was an application for a Mareva injunction to freeze the assets of the Defendant within British Columbia pending arbitration in London. The underlying action concerned an alleged repudiation of a charter party agreement between the parties. The motions Judge set out the applicable tri-partite test for an interlocutory injunction, being: 1. a preliminary assessment of the merits to ensure that there is a serious issue to be tried; 2. a determination that the applicant would suffer irreparable harm if the application is refused; and 3. an assessment as to which party would suffer greater harm from the granting or refusal of the injunction. Regarding the “serious issue” branch of the test, the motions Judge noted that the threshold for normal injunctive relief is that the issue is not frivolous or vexatious, however, the threshold for a Mareva injunction is more stringent, being, “a strong prima facie case”. The motions Judge then set out the specific criteria for a Mareva injunction, being: 1. the Plaintiff must make full and frank disclosure of all material matters; 2. the Plaintiff must give particulars of the claim including the points made against it by the Defendant; 3. the Plaintiff should give some grounds for believing the Defendant has assets in the jurisdiction; 4. the Plaintiff should give some grounds for believing that there is a risk of the assets being removed from the jurisdiction; and 5. the Plaintiff must give an undertaking in damages, which in suitable cases should be supported by a bond or other security. The motions Judge noted that the requirement of full and frank disclosure is flexible in that mere imperfections in affidavits or the non-disclosure of inconsequential or immaterial facts will not be fatal. The Judge applied these tests and ultimately granted the order requested. Appeals – Overruling Prior Panels – Appeals to Supreme Court
Ex Parte Injunctions - Picketing by Water - Jurisdiction
Corner Brook Pulp & Paper Ltd v. Comm. Energy & Paper Workers Union, 1999 CanLII 8507
This was an ex parte application for an injunction to restrain the Defendants from picketing the Plaintiff's wharf. The Defendants had erected a rope fence in the water opposite the Plaintiff's wharf and used small boats to allegedly interfere with vessels intending to dock at the wharf. The court noted that only in the most exceptional circumstances will an ex parte injunction be granted. There must be evidence that unlawful conduct created a situation of urgency. The court declined the order sought. First, the court considered that the Plaintiff had not made out a case of sufficient urgency. Second, although the court accepted that the matter fell within the maritime jurisdiction of the Federal Court, it was thought that the Provincial superior court was a more appropriate forum as the substance of the dispute was a labour matter.
Injunctions - Damages
Ordina Ship Management Ltd. v. Unispeed, 1998 CanLII 8785
This was an action was for non-payment of charter hire. The Plaintiff obtained an ex parte mareva injunction which was later continued. The Plaintiff subsequently brought a motion to stay the action in favour of arbitration pursuant to the terms of the charter party and abandoned its injunction. The Defendant thereafter brought this application for assessment of damages suffered as a consequence of the injunction. The Defendant's application was dismissed. The Court held that it was not appropriate to assess damages until the matter was disposed of on its merits following the arbitration.
Navi Mont Inc. v. Rigel Shipping Canada Inc., 1997 CanLII 5130
This was an application for an interlocutory injunction directing the Defendant to continue to operate various ships in accordance with a contract of affreightment. The underlying issue in the action was whether one of the Plaintiffs was entitled to assign its interest in the contract of affreightment to the other Plaintiff that was specifically created for that purpose. The Court referred to the three stage test for granting an injunction: that there be a serious question to be tried; that the applicant would suffer irreparable harm if the injunction is refused; and, that the balance of convenience favours granting the injunction. Although the Court held that there was a serious question to be tried concerning the assignment, it was not satisfied that any harm suffered by the Plaintiffs could not be adequately compensated by an award of damages. In the result, therefore , the injunction was refused.