Judges have a broad discretion to award various remedies to parties in a lawsuit. The most commonly sought and awarded remedy is monetary damages or compensation. In some circumstances monetary compensation may be inadequate to appropriately compensate a party for the loss he or she will suffer. Therefore, judges also have the power to award equitable remedies such as a mandatory injunction or a prohibitory injunction.

The difference between a mandatory injunction and a prohibitory injunction is that the latter prohibits a party from doing something whereas the former requires a party to do something. It is important to note that a party seeking a prohibitive injunction does not have to wait for a result at trial. An injunction can be obtained before the action happens and can be used as a preventative measure.

An order for an injunction is available at two stages of the lawsuit: a temporary injunction, which is obtained while the lawsuit is ongoing (also known as an interlocutory injunction), and a permanent injunction, which is obtained after a final judgment is ordered and lasts indefinitely.

The aim of an interlocutory injunction is to preserve the courts’ ability to do justice for a party until the trial or final decision can be made. The problem is that judges must weigh protecting the plaintiff’s interests with the potential harm granting the injunction may cause to the defendant, particularly if the defendant is ultimately successful.  As such, the standard to obtain an interlocutory injunction is especially high for mandatory injunctions due to the intrusive nature the injunction imposes on the defendant. In comparison, the threshold for a prohibitive injunction is much lower.

To obtain an interlocutory injunction, the Plaintiff must demonstrate:

  1. for a mandatory injunction that there is a very strong likelihood that he or she will be successful with his or her lawsuit (high threshold), whereas for a preventative injunction that there is a serious issue to be determined (low threshold);
  2. whether the Plaintiff will suffer irreparable harm if the injunction is not granted (for example, regarding a former employee that competes or solicits, it will be impossible to quantify damages); and,
  3. whether the balance of convenience favours granting the injunction.

In Mackovic v. Dudo Developments Limited, the Plaintiffs purchased five unique development lots from the Defendants with take-back mortgages payable twelve months after the closing date. After closing, the Plaintiffs discovered several defects that caused additional delay and cost to develop the land. The Plaintiffs refused to pay the mortgages and started a lawsuit against the Defendants for misrepresentation. They sought compensation worth considerably more than the take-back mortgages. Since the Plaintiffs refused to pay the mortgages, the Defendants served notices of power of sale. In response, the Plaintiffs sought an injunction to stop the Defendants from selling the lots pending the completion of this litigation.

The judge found that there was evidence to demonstrate that the defendants made representations about the suitability of the property for development and because inherent defects were not disclosed, the plaintiffs had suffered considerable delay and additional cost that greatly exceeded the take-back mortgages. Moreover, the Court decided that the defendants would not likely be able to pay any damage award because there was no evidence to show that the defendants possessed any equity in the lots. As a result, refusal to grant the injunctive relief could adversely affect the plaintiffs and the plaintiffs would suffer the greater harm if the injunctive relief was not granted. As a result, the Court granted the injunction.

Going Forward

Typically, injunctions are brought within a very small-time frame and are very labour intensive. As such, it is important to weigh the high cost and potential stress of an injunction with the likelihood of success and the need to protect the plaintiff’s interest. If you have any questions about injunctions, please contact Walker Law civil litigation lawyers for assistance.

Tags: Civil Litigation Law, Commercial Litigation Law, Commercial Real Estate Disputes, Contract Disputes, Residential Real Estate Disputes.

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