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ARTICLE · 25 JUNE 2020

Undertaking As To Damages In Context Of Dismissal For Delay

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When bringing an interlocutory injunction, the moving party must typically give an undertaking as to damages, meaning if that party ultimately loses at trial, it may be forced to pay the damages incurred by the other party as a result of the injunction.

CanadaLitigation, Mediation & Arbitration
Norton Rose Fulbright Canada LLP
Norton Rose Fulbright Canada LLP
Jessica Warwick
Jessica Warwick
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When bringing an interlocutory injunction, the moving party must typically give an undertaking as to damages, meaning if that party ultimately loses at trial, it may be forced to pay the damages incurred by the other party as a result of the injunction. In Ralph's Auto Supply (B.C.) Ltd v Ken Ransford Holdings Ltd., the British Columbia Court of Appeal considered whether such an undertaking should be enforced after the action was dismissed for want of prosecution.

Background

In 2010, the plaintiff commenced an action against the defendant, alleging it breached a restrictive covenant contained in a share purchase agreement. Shortly after the action was commenced, the plaintiff sought and obtained an interim injunction restraining the defendant from selling automotive cores for five years. As is typically required, the plaintiff gave an undertaking as to damages – namely, to abide by any subsequent order the court may make to pay the defendant's damages.

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