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The Balance of Convenience in Granting an Interlocutory Injunction in British

December 15, 2021

British Columbia

,

Canada

Issue

When will the court grant an injunction pursuant to the Community Charter, SBC 2003, c. 26, s. 274?

Conclusion

Under s. 274 of the Community Charter, SBC 2003, c 26, a municipality may enforce, or prevent or restrain the contravention of,

(a) a bylaw or resolution of the council under this Act or any other Act, or

(b) a provision of this Act or the Local Government Actor a regulation under those Acts. (Community Charter)

The well‑known test for granting an interlocutory injunction, pursuant to s. 274 of the Community Charter, involves consideration of three factors:

a) is there a serious issue to be tried;

b) will the applicant suffer irreparable harm if the order is not granted; and

c) does the balance of convenience favour granting the injunction? (Squamish (District) v 0742848 B.C. Ltd.)

The traditional test for the granting of an interim injunction in British Columbia is two-pronged. First, the applicant must satisfy the Court that there is a fair question to be tried as to the existence of the right which he alleges and a breach thereof, actual or reasonably apprehended. Second, he must establish that the balance of convenience favours the granting of an injunction. In the three-stage test for the granting of interlocutory injunctions rather than the two-stage test, the requirements are that

(1) a fair question to be tried;

(2) irreparable harm and

(3) balance of convenience favouring the injunction. While one might prefer to view the requirement of irreparable harm as integral to the assessment of the balance of convenience between the parties, the practical effect of the two approaches is the same. (British Columbia (Attorney General) v. Wale)

The first step in determining where the balance of convenience lies is to examine the adequacy of damages as a remedy for the respective parties. In most cases, an interlocutory injunction should not be granted unless there is doubt whether damages would be an adequate remedy in the event the applicant succeeds t trial. In other words, it must be shown that the applicant may suffer irreparable arm in the sense that the remedy of damages is not such a compensation as will effect, though not in specie, place the parties in the position in which they formerly stood. The requirement that there be doubt as to whether damages will be an adequate remedy is basically a matter of common sense. If damages will be an adequate remedy, and if it appears that the alleged offender can pay them, the court is generally not justified in giving one party his remedy to the detriment of the other before the issues have been tried. In many cases, assessing where the balance of convenience lies is a simple matter. Where there is a fair question to be tried and the applicant demonstrates that damages may not provide an adequate remedy, an interlocutory injunction may e justified. Similarly, if the only irreparable harm would be to the party against whom the injunction is sought, an injunction would not normally be granted. (British Columbia (Attorney General) v. Wale)

More difficult is the case where both parties demonstrate that damages might not be an adequate remedy - the applicant if no injunction is granted, the Respondent if an injunction goes. One factor which may assist the court in assessing where the balance of convenience lies when le parties' interests are relatively evenly balanced is the fact that one side bases its claim on existing rights, while enforcement of the other's rights would change le status quo. To put it another way, where the only effect of an injunction is to postpone the date upon which a person is able to embark on a course of action not previously open to him, it is a counsel or prudence to preserve the status quo. Another factor which may be considered at this stage is the strength of the applicant's case. Finally, there may be special factors to be considered in the particular circumstances of the case. It is important to note that clear proof of irreparable harm is not required. Doubt as to the adequacy of damages as a remedy may support an injunction. (British Columbia (Attorney General) v. Wale)

The terms "irreparable harm", "status quo", 'balance of convenience" do not have a precise meaning. They are more properly seen as guides which take colour and definition in the circumstances of each case. More importantly, they ought not to be seen as separate, watertight categories. These factors relate to each other, and strength on one part of the test ought to be permitted to compensate for weakness on another. The traditional "checklist" approach permits the individual judge to analyze all the factors coherently. It does not, however, require him to do so, and the flexibility, which permits one judge to weigh and balance the risk accurately, allows another to depart from the central question and allows for uncertainty and unevenness in approach. The checklist does not specifically relate the factors to one another, and while it provides a valuable guide in coming to the proper result, it has failed to articulate clearly an appropriate overall approach. Treating the checklist as a "multi-requisite test" will often produce results which do not reflect the balance of risk and do not minimize the risk of non-compensable harm. The checklist of factors which the courts have developed - relative strength of the case, irreparable harm, and balance of convenience - should not be employed as a series of independent hurdles. It should be seen in the nature of evidence relative to the central issue of assessing the relative risks of harm to the parties from granting or withholding interlocutory relief. (British Columbia (Attorney General) v. Wale)

While the court should be reluctant to refuse the injunction sought on a discretionary ground, nevertheless discretion may be engaged where the applicant has encouraged, or by its silence permitted, the conduct which it now seeks to enjoin and where the person to be enjoined has exerted effort to comply with the lawful requirements of the applicant. (Town of Osoyoos v. Rattlesnake Canyon Family Entertainment Park Inc.)

Whether the criteria for an injunction is two-part or three may be a topic of debate for scholars. In British Columbia the common test for injunctions has been two-pronged since British Columbia (Attorney General) v. Wale, with the issue of irreparable harm being subsumed into the discussion of balance of convenience (or inconvenience). The distinction is likely without practical effect. The question in most cases is the relative weight of the convenience and inconvenience of the order sought, always considering the paramount measure, the interests of justice. (Palmer v. City of Burnaby)

Law

Under s. 274 of the Community Charter, SBC 2003, c 26, a municipality may enforce, or prevent or restrain the contravention of, (a) a bylaw or resolution of the council under this Act or any other Act, or (b) a provision of this Act or the Local Government Actor a regulation under those Acts:

Actions by municipality

274 (1)A municipality may, by a proceeding brought in Supreme Court, enforce, or prevent or restrain the contravention of,

(a)a bylaw or resolution of the council under this Act or any other Act, or

(b)a provision of this Act or the Local Government Act or a regulation under those Acts.

(2)For a civil proceeding referred to in subsection (1), or relating to any damage to or interference with a highway in the municipality,

(a)the proceeding may be brought by the municipality in its own name,

(b)it is not necessary that the Provincial government, the Attorney General or an officer of the Provincial government be a plaintiff in the proceeding, and

(c)the municipality must serve a copy of the originating documents on the Attorney General

(i)before the end of the period prescribed by the Supreme Court Civil Rules for filing a response to civil claim by the defendant, or

(ii)within a further time that may be allowed by the court.

(3)The authority under subsection (1) is in addition to any other remedy or penalty provided under this Act or the Local Government Act and may be exercised whether or not a penalty has been imposed for the contravention.

In Squamish (District) v 0742848 B.C. Ltd., 2021 BCSC 301 (CanLII), Skolrood J. stated the well‑known test for granting an interlocutory injunction, pursuant to s. 274 of the Community Charter:

[9] Section 274 of the Community Charter authorizes a municipality to apply to enforce a bylaw by way of an injunction in this Court. In its notice of application, Squamish cites the well‑known test for granting an interlocutory injunction which involves consideration of three factors:

a) is there a serious issue to be tried;

b) will the applicant suffer irreparable harm if the order is not granted; and

c) does the balance of convenience favour granting the injunction?

See RJR -- MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311.

[10] In British Columbia, the courts often consider, as well, the decision in British Columbia (Attorney General) v. Wale (1986), 1986 CanLII 171 (BC CA), 9 B.C.L.R. (2d) 333 (C.A.), where the test is formulated slightly differently. However, nothing turns on that for the purposes of this application.

In British Columbia (Attorney General) v. Wale, 1986 CanLII 171 (BC CA), the Court of Appeal discussed both the 2-pronged and the 3-pronged test for granting an injunction:

The Tests for Granting an Interim Injunction

The traditional test for the granting of an interim injunction in British Columbia is two-pronged. First, the applicant must satisfy the Court that there is fair question to be tried as to the existence of the right which he alleges and a each thereof, actual or reasonably apprehended. Second, he must establish that e balance of convenience favours the granting of an injunction.

[Page 5]

The decision in American Cyanamid Company v. Ethicon Limited [1975] A.C. 396 (H.L.) may be read as suggesting a three-stage test for the granting of interlocutory injunctions rather than the two-stage test to which I have referred, he requirements being (1) a fair question to be tried; (2) irreparable harm and 3) balance of convenience favouring the injunction. While I prefer to view the requirement of irreparable harm as integral to the assessment of the balance of convenience between the parties, the practical effect of the two approaches is the same.

The first step in determining where the balance of convenience lies is to examine the adequacy of damages as a remedy for the respective parties. In most cases, an interlocutory injunction should not be granted unless there is doubt whether damages would be an adequate remedy in the event the applicant succeeds t trial. In other words, it must be shown that the applicant may suffer irreparable arm in the sense that "the remedy of damages is not such a compensation as will effect, though not in specie, place the parties in the position in which they formerly stood: " Kerr On Injunctions, 6th ed., at pp. 17 - 18, applied in lacMillan-Bloedel Limited v. Mullin et al., 1985 CanLII 154 (BC CA), [1985] 3 W.W.R. 577 (B.C.C.A.), per Seaton J.A. The requirement that there be doubt as to whether damages will be an adequate remedy is basically a matter of common sense. If damages will be an adequate remedy, and if it appears that the alleged offender can pay them, the court is generally not justified in giving one party his remedy to the detriment of he other before the issues have been tried.

In many cases, assessing where the balance of convenience lies is a simple utter. Where there is a fair question to be tried and the applicant demonstrates

[Page 6]

that damages may not provide an adequate remedy, an interlocutory injunction may e justified. Similarly, if the only irreparable harm would be to the party against whom the injunction is sought, an injunction would not normally be granted.

More difficult is the case where both parties demonstrate that damages light not be an adequate remedy - the applicant if no injunction is granted, the Respondent if an injunction goes. In American Cyanamid Company v. Ethicon limited, supra, considerations are discussed which may assist the court. One factor which may assist the court in assessing where the balance of convenience lies when le parties' interests are relatively evenly balanced is the fact that one side bases is claim on existing rights, while enforcement of the other's rights would change le status quo. To put it another way, where the only effect of an injunction is to postpone the date upon which a person is able to embark on a course of action not previously open to him, it is a counsel or prudence to preserve the status quo Pacific Northwest Inc. v. Downs and Associates (1983), 1982 CanLII 519 (BC CA), 42 B.C.L.R. 126 (B.C.C.A.) Another factor which may be considered at this stage is the strength of the applicant's case. Finally, there may be special factors to be considered in the particular circumstances of the case.

It is important to note that clear proof of irreparable harm is not required. Doubt as to the adequacy of damages as a remedy may support an injunction: American Cyanamid Company v. Ethicon Limited, supra.

Having set out the usual procedure to be followed in determining whether > grant an interlocutory injunction, it is important to emphasize that the judge gust not allow himself to become the prisoner of a formula. The fundamental

[Page 7]

question in each case is whether the granting of an injunction is just and equitable in all the circumstances of the case. Professor Sharp warns against the danger of insisting on slavish adherence to precise formulae in Injunctions and Specific Performance at p. 186:

The terms "irreparable harm", "status quo", 'balance of convenience" do not have a precise meaning. They are more properly seen as guides which take colour and definition in the circumstances of each case. More importantly, they ought not to be seen as separate, watertight categories. These factors relate to each other, and strength on one part of the test ought to be permitted to compensate for weakness on another. It is not clear that the Cyanamid approach allows for this, and the decision suggests a misleading mechanical approach. The Manitoba Court of Appeal [ in Lambair Limited v. Aero Trades (Western) Limited (1978), 1978 CanLII 1969 (MB CA), 87 D.L.R. (3d) 500, leave to appeal to the Supreme Court of Canada refused October 4, 1978] has quite properly held that it is not necessary ... to follow the consecutive steps set out in the American Cyanamid judgment in an inflexible way; nor is it necessary to treat the relative strength of each party's case only as a last step in the process.

The traditional "checklist" approach permits the individual judge to analyze all the factors coherently. It does not, however, require him to do so, and the flexibility, which permits one judge to weigh and balance the risk accurately, allows another to depart from the central question and allows for uncertainty and unevenness in approach. The checklist does not specifically relate the factors to one another, and while it provides a valuable guide in coming to the proper result, it has failed to articulate clearly an appropriate overall approach.

Treating the checklist as a "multi-requisite test" will often produce results which do not reflect the balance of risk and do not minimize the risk of non-compensable harm .. .

The checklist of factors which the courts have developed - relative strength of the case, irreparable harm, and balance of convenience - should not be employed as a series of independent hurdles. It should be seen in the nature of evidence relative to the central issue of assessing the relative risks of harm to the parties from granting or withholding interlocutory relief.

In Town of Osoyoos v. Rattlesnake Canyon Family Entertainment Park Inc., 2005 BCSC 307 (CanLII), the plaintiff applied for an injunction, pursuant to s. 274 of the Community Charter, restraining the defendant from operating its go-cart business until it was issued a valid business licence:

[30] In the event that I am wrong in this conclusion, I turn to the plaintiff’s application for an injunction restraining the defendant from operating its go-cart business “until it has been issued a valid business licence...authorizing the operation of the go-cart track”. The defendant says, first of all, that the test is the conventional, equitable test which requires the court to consider irreparable harm from the aspect of both the plaintiff and the defendant, as well as the balance of convenience. The plaintiff says that, because this is an application for a statutory injunction, such equitable considerations should not apply. The notice of motion does not specify any rule or enactment relied upon, but in support of its application, the plaintiff has referred to s. 274(1) of the Community Charter, S.B.C. 2003, c. 26 which says:

274 (1) A municipality may, by a proceeding brought in Supreme Court, enforce, or prevent or restrain the contravention of,

(a) a bylaw or resolution of the council under this Act or any other Act...

[31] I am satisfied that the plaintiff is seeking a statutory injunction and that the conventional equitable considerations need not be dealt with. However, while I am satisfied that the court should be reluctant to refuse the injunction sought on a discretionary ground, nevertheless discretion may be engaged where the applicant has encouraged, or by its silence permitted, the conduct which it now seeks to enjoin and where the person to be enjoined has exerted effort to comply with the lawful requirements of the applicant. (See Coquitlam (City) v. HOC Hyperbaric Care Centre Inc., [1999] B.C.J. No. 193 (S.C.) and Nelson (City) v. Krantz, [1999] B.C.J. No. 193 (S.C.), where the injunction was granted but enforcement delayed.)

In Palmer v. City of Burnaby, 2006 BCSC 165 (CanLII), Josephson J. noted that the distinction between the two-part test and the three-part test for granting an injunction is likely without practical effect:

a) A Two-Part Test or a Three-Part Test?

[26] Prior to the Supreme Court of Canada decision in RJR Macdonald, the applicable test for interlocutory injunctions in British Columbia was set out by the B.C. Court of Appeal in AGBC v. Wale. There, at ¶46, McLachlin J.A. (as she then was) stated:

The traditional test for the granting of an interim injunction in British Columbia is two-pronged. First, the applicant must satisfy the court that there is a fair question to be tried as to the existence of the right which he alleges and a breach thereof, actual or reasonably apprehended. Second, he must establish that the balance of convenience favours the granting of an injunction.

[27] That decision referred to the three-part test set out by the House of Lords in Amer. Cyanamid Co. v. Ethicon Ltd., [1975] A.C. 396, [1975] 1 All E.R. 504 (H.L.). That test required that an applicant, in addition to making out that there was a fair question to be tried and that the balance of convenience favoured the granting of the injunction, show irreparable harm would ensue if the injunction were not granted. McLachlin J.A. minimized the distinction between the two tests, noting at ¶47 that “the practical effect of the two approaches is the same.”

[28] In the subsequent case of RJR Macdonald, the Supreme Court of Canada employed the three-stage American Cyanamid test rather than the two-stage test favoured by the B.C. Court of Appeal in AGBC v. Wale. As a result, this issue remains somewhat unresolved. In Mudie v. B.C. Rail Ltd (2002) 120 A.C.W.S. (3d) 495, 2002 BCSC 1515, Tysoe J. provided cogent reasons for applying the three-part test in all instances. The most recent decisions of the B.C. Court of Appeal, however, do not appear to be entirely consistent on this point, with the court favouring one approach over the other in some instances (Tri-Sil Minerals Inc. v. Mineral Hill Industries Ltd., 2005 BCCA 180), while referring to both approaches, but applying one in others (Zeo-Tech Enviro Corp. v. Maynard, 2005 BCCA 392; and Expert Travel Financial Security (ETFS) Inc. v. BMS Harris & Dixon Insurance Brokers Ltd., 2005 BCCA 5).

[29] The Court of Appeal minimized the distinction between the two tests in Coburn v. Nagra, 2001 BCCA 607, at ¶7. There Saunders J.A. stated:

Whether the criteria for an injunction is two part or three may be a topic of debate for scholars. In British Columbia the common test for injunctions has been two-pronged since British Columbia (Attorney General) v. Wale (1986), 1986 CanLII 171 (BC CA), 9 B.C.L.R. (2d) 333 (B.C. C.A.), with the issue of irreparable harm being subsumed into the discussion of balance of convenience (or inconvenience). As Madam Justice McLachlin (now C.J.C.) noted in Wale, the distinction is likely without practical effect. The question in most cases is the relative weight of the convenience and inconvenience of the order sought, always considering the paramount measure, the interests of justice.

[30] The words of Sharpe J., as cited at 51 of AGBC v. Wale are likewise apposite on this point:

The terms “irreparable harm”, “status quo”, “balance of convenience”, do not have a precise meaning. They are more properly seen as guides which take colour and definition in the circumstances of each case. More importantly, they ought not to be seen as separate, watertight categories.

[31] With this in mind, and for the reasons set out below, I find that the plaintiff has failed to show either:

1) that he will suffer irreparable harm in the event that his application is not granted, or

2) that the balance of convenience favours granting the relief sought.

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