The plaintiff, a general contractor, sought an injunction to prevent Tarion Warranty Corporation from drawing on two performance bonds after Tarion terminated the plaintiff from a repair project for a leaking condominium parking garage.
The plaintiff argued the bonds were conditional payment obligations subject to a repair agreement.
The court found the bonds were autonomous demand bonds, meaning Tarion's right to call on them was independent of the underlying contract.
Applying the Supreme Court's decision in Angelica-Whitewear, the court held that an injunction against a demand bond requires a strong prima facie case of fraud.
As the plaintiff did not allege fraud, the motion was dismissed.
The court also noted the plaintiff would fail the traditional RJR-MacDonald test for injunctive relief.
