Undertaking as to damages and injunctions

Mercer Gold Corporation (Nevada) v. Mercer Gold Corp. (B.C.),  2012 BCCA  103 deals with leave to appeal from an order granting an interlocutory injunction.  The appellant argued that the respondent, who obtained the injunction, was excluded from such relief because the respondent could not give a meaningful undertaking as to damages.  The Court refused to accede to that submission saying the failure to give a meaningful undertaking was a factor but not dispositive.  In Ontario, Rule 40.03 requires the undertaking and it will be a rare case where a meaningful undertaking is not required.  The Court holds:

 

 

[3]             Leave is sought on two grounds.  The first is that the judge erred in failing to consider the evidence that Mercer Nevada was incapable of giving any meaningful undertaking as to damages.  The second is that he erred in law in finding that a commercial arbitration panel has the power to grant relief against forfeiture.

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[7]             Mercer BC proposes to advance a proposition in support of the first ground which, in my opinion, is unsupportable.  Counsel for Mercer BC submitted that there are some exceptional cases, of which this is an example, where the absence of a meaningful undertaking is so grossly unfair that an injunction cannot issue.  Yet, he candidly admitted that no case goes that far and that the current state of the law is that the absence of a meaningful undertaking is one factor, but is by no means determinative per se.  No case holds that the absence of the ability to give a meaningful undertaking as to damages is fatal to an otherwise meritorious application for an injunction.