What is the purpose of a customary undertaking as to pay damages under an injunction?

The purpose of the customary undertaking as to damages is to protect the party against whom the injunction is granted, in this case Dunn Aggregates, if the injunction were found to have been wrongly granted. The trial judge cited several authorities for this proposition and pointed to the decision in United States of America v. Yemec, 2013 ONSC 50, 35 C.P.C. (7th) 57, aff’d 2014 ONCA 274, 58 C.P.C. (7th) 223 as being especially persuasive. In Yemec, Belobaba J. considered the undertaking to pay damages and noted, at para. 14, that its purpose is “to cover damage caused by a wrongly granted injunction.”