The applicant sought a permanent injunction to restrain the respondent from breaching negative covenants in their long-term Royalty Agreement governing a collision repair shop network.
The respondent, which operated 65 shops under the applicant's brand, gave notice of its intention to unilaterally leave the relationship and rebrand its shops, openly acknowledging this would constitute a breach of contract.
The respondent argued damages would be an adequate remedy, invoking the concept of efficient breach.
The court rejected this argument, finding the damages were too complex, multi-layered, and potentially incalculable over the remaining 19-year term to make monetary compensation adequate.
The court granted the permanent injunction enforcing the negative covenants and awarded costs of $185,000 to the applicant.
