John Deere Limited, 2011 ONSC 3791
DIVISIONAL COURT FILE NO.: 10-DC-1642 Court File No. 00-CV-15402 DATE: 2011/06/17
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
CUNNINGHAM A.C.J., VALIN and ARRELL JJ.
BETWEEN:
LES ÉQUIPEMENTS DE FERME CURRAN LTÉE/CURRAN FARM EQUIPMENT LTD. Plaintiff/Appellant
– and –
JOHN DEERE LIMITED Defendant/Respondent
Shawn J. O’Connor, and Katherine A. Cotton, for the Plaintiff/Appellant
John P. O’Toole, and Mandy E. Moore, for the Defendant/Respondent
AND BETWEEN
LES ÉQUIPEMENTS DE FERME CURRAN LTÉE/CURRAN FARM EQUIPMENT LTD. Plaintiff/Respondent
- and –
JOHN DEERE LIMITED Defendant/Appellant
Divisional Court File No. 10-DC-1698 Court File No. 00-CV-15402
Shawn J. O’Connor, and Katherine A. Cotton, for the Plaintiff/Respondent John P. O’Toole, and Mandy E. Moore, for the Defendant/Appellant
HEARD: June 14, 2011
REASONS FOR JUDGMENT
Introduction:
[1] This hearing involves two appeals. The first by Curran Farm Equipment Ltd. (“Curran”) seeking to set aside the order of James J. dated May 28, 2010 dissolving an interlocutory injunction granted on consent almost ten years ago.
[2] The second appeal is by John Deere Limited (“Deere”) seeking to set aside the order of Scott J. dated August 19, 2010, which granted Curran an interim injunction, similar to the consent injunction James J. had dissolved three months earlier.
[3] For the reasons that follow the appeal of Curran is dismissed and the appeal of Deere is allowed.
Facts:
[4] Curran has been a dealer for Deere for over 30 years. The relationship between the two parties has been governed by a dealership agreement.
[5] The relationship between the parties deteriorated. Over ten years ago Deere sought to terminate its dealership agreement with Curran, which in turn obtained an interim injunction on consent preventing Deere from ending the agreement.
[6] It is notable that close to ten years have elapsed without a trial taking place on those issues. During that time, Curran lost two out of its three business locations. One simply closed in 2006; the other in Maxville was destroyed by fire in 2008. Curran is currently constructing a new business facility in St. Isidore to replace the Maxville location. However, it is not yet operational.
[7] In 2009, Deere sought to have the consent injunction dissolved. At the same time Curran sought to increase its prayer for relief from $2 million to $9 million.
[8] By order dated May 28, 2010, James J. granted the relief requested by each party. Immediately thereafter, Curran filed a motion to appeal the order and to seek a stay, which relief was granted by Ray J. on July 5, 2010.
[9] While waiting for those motions to be heard, by letter dated June 18, 2010, Deere attempted to immediately terminate the agreement on the grounds of an unauthorized location (St. Isidore) and the failure of Curran to obtain the required license under the Farm Implements Act, O. Reg. 123/06.
[10] Upon receipt of the termination letter for cause Curran immediately brought a motion for fresh injunctive relief, which was granted by Scott J. on August 19, 2010.
Analysis:
[11] The standard of review is set out in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 where the Supreme Court of Canada held that:
(a) The standard of review on a question of law is that of correctness;
(b) The standard of review for findings of fact is that such findings are not to be reversed unless it can be established that the trial judge made a palpable and overriding error; and
(c) Questions of mixed fact and law are subject to the palpable and overriding error standard of review unless it is clear that the trial judge made some error of law or principle that can be identified independent of the judge’s application of the law to the facts of the case.
[12] We are of the opinion that Scott J. drew conclusions which were not supported by the evidence;
(a) The lapse of Curran’s registration was not known to Deere when before James J.;
(b) There was no evidence to suggest Deere was overreaching or trying to confuse the real issues before us;
(c) The balance of convenience comments of Ray J. were in reference to the stay motion and not the injunction;
(d) He thought there were two actions; and
(e) That Deere did not act honestly, fairly and in good faith without considering the history prior to the original injunction and during the decade that followed, including the evidence of the rationale for issuing the supplementary termination notice.
[13] We are of the view that these conclusions constitute reversible error.
[14] The appropriate test for an injunction is the three-part test set out by the Supreme Court of Canada in RJR–MacDonald Inc. v. Canada (Attorney General), [1994] S.C.R. No. 17 at para.43;
(a) There is a serious issue to be tried, in the sense that the claim is not frivolous or vexatious;
(b) There will be irreparable harm to the plaintiff if the injunction is not given, which might not adequately be compensated for in damages; and
(c) The balance of convenience favours granting the injunction.
[15] An interlocutory injunction is an extraordinary and drastic restraint on the liberty of action of the enjoined party, in circumstances where the merits of the other party’s complaints have yet to be determined. (Ciba-Geigy Ltd. v. Novopharm Ltd., 1997 6388 (FC), [1997] F.C.J. No. 1836 (T.D.))
[16] Irreparable harm must be clear and not speculative. It is harm which either cannot be quantified in monetary terms or which cannot be cured. If the nature of the damages can be calculated in money, then no matter how difficult it may be to quantify the damages, the court should decline to grant an injunction. (Barton-Reid Canada Ltd. v. Alfresh Beverages Canada Corp., [2004] O.J. No. 4116 (S.C.J.))
[17] We are of the view that the evidence before Scott J. fell short of what is required to prove irreparable harm to Curran that could not be compensated for in damages. The evidence that Curran might have to go out of business if it lost the Deere dealership was speculative. If Curran can prove a loss of its business as a result of the improper actions of Deere at trial then damages will flow. Deere has the ability to pay those damages. There would not appear to be any reasonable likelihood of damages which cannot be quantified.
[18] We are also of the view that the evidence before Scott J. did not support the conclusion that the balance of convenience favours Curran. Given the significant evidence of hostility over a very lengthy period of time, it is unreasonable to think it would be in the interests of either party to continue this hostile relationship that will require ongoing court supervision, particularly when the termination of the relationship may well be inevitable. (See Barton-Reid Canada Ltd., supra. para. 18)
[19] For the reasons given, we are of the view that there was reversible error by Scott J. in granting the injunction.
[20] James J. correctly noted that interlocutory injunctions are intended to preserve the rights of the party claiming the benefit of the injunction pending a trial. There was ample evidence before him to conclude that Curran could have prosecuted this action to trial much sooner if it genuinely wished to do so and he so found.
[21] James J. was fully alive to the appropriate factors for dissolving an injunction as discussed in Look Communications v. Bell Canada Inc., 2009 CarswellOnt 1784 (Sup. Ct.):
(a) Has there been inordinate delay in advancing the claim;
(b) The harm to the defendant;
(c) The balance of convenience;
(d) Whether the facts as presented today are substantially different from the facts upon which the original order was given or have changed so dramatically that the factual underpinnings of the original order are no longer valid.
[22] James J. was aware that the original injunction was on consent and therefore no decision was made on the three-pronged test in RJR-McDonald, supra. He drew conclusions from the evidence of: the inordinate delay; the lack of diligence in prosecuting the litigation by Curran the beneficiary of the injunction; the hostile relationship of the parties; the likelihood of further litigation if the parties were forced by the courts to continue their business relationship; and the granting of the increase to Curran's claim to allow for full damages at trial with suitable proof.
[23] We conclude that there was evidence before Justice James to support his conclusions and there was no reversible error.
Conclusion:
[24] For the reasons given the appeal of Deere is allowed and the order of Justice Scott is set aside.
[25] The appeal of Curran to set aside the order of Justice James is dismissed.
Costs:
[26] John Deere Limited will have its costs fixed at $35,000 for these appeals, leaves to appeal and the hearing before Scott J., payable by Curran Farm Equipment Ltd.
Cunningham A.C.J.
Valin J.
Arrell J.
Released: June 17, 2011
John Deere Limited, 2011 ONSC 3791
DIVISIONAL COURT FILE NO.: 10-DC-1642
Court File No. 00-CV-15402
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
CUNNINGHAM A.C.J., VALIN and ARRELL JJ.
BETWEEN:
LES ÉQUIPEMENTS DE FERME CURRAN LTÉE/CURRAN FARM EQUIPMENT LTD.
Plaintiff/Appellant
– and –
JOHN DEERE LIMITED
Defendant/Respondent
AND BETWEEN:
Divisional Court File No. 10-DC-1698
Court File No. 00-CV-15402
LES ÉQUIPEMENTS DE FERME CURRAN LTÉE/CURRAN FARM EQUIPMENT LTD.
Plaintiff/Respondent
– and –
JOHN DEERE LIMITED
Defendant/Appellant
REASONS FOR JUDGMENT
Cunningham A.C.J.
Valin J.
Arrell J.
Released: June 17, 2011