Indexed as:

Big Chief Petroleum Ltd. v. Gas & Go Services Inc.

Between

Big Chief Petroleums Ltd., plaintiff, and

Gas & Go Services Inc., Malden Petroleums Inc. and Michael

Faubert, defendants

[1983] O.J. No. 538

Ontario Supreme Court - High Court of Justice

Toronto Motions Court

Barr J.

Heard: November 4, 1983.

Oral Judgment: November 4, 1983.

Reasons: November 28, 1983.

(6 pp.)

J. Douglas Crane, Q.C., for the applicant.

R.G. Colautti, for the respondent.

1 BARR J. (orally):-- This is an application for leave to appeal to the Divisional Court from an Order of Mr. Justice Potts in which he declined to grant an interlocutory injunction. It falls, therefore, within the provisions of Rule 499(b) which requires a judge hearing an application such as today's application to determine that it appears to him that there is good reason to doubt the correctness of the decision appealed from and that the appeal involves matters of such importance that, in the opinion of the judge, leave to appeal should be granted. It will be seen that the jurisdiction I have is extremely limited and it goes without saying, of course, that it is entirely immaterial whether I would have arrived at the same decision as Mr. Justice Potts in the first instance or not. He was exercising a discretion and the matter is to go no further unless the two requirements mentioned in the Rule have been met.

2 In reading the reasons of Mr. Justice Potts, it seems that there is a substantial amount of common ground as to the law to be applied. But there is one particular statement which counsel for the applicant submits to be in error at p. 10 of the Appeal Book and p. 2 of the reasons of Mr. Justice Potts, which reads;

1. "Turning to the balance of convenience, I must find that the plaintiff will suffer harm which could not be adequately compensated in damages if it is to be successful: American Cyanamid v. Ethicon et al. (1975), 1 All E.R. 504."

3 Mr. Crane submits that the word "will" quoted in that context puts far too heavy a burden on his client and that the proper word should be "may". I do not think that, for my purposes, it is necessary for me to resolve this issue and I am content to deal with this application on the basis that the word "may" is the proper one merely because that imposes the least standard of proof on Mr. Crane's client.

4 Mr. Justice Potts found that a prima facie case had been made out by the plaintiff and again various adjectives could be used to describe the type of case to be made out. As a matter of fact, Mr. Justice Potts to be more accurate said that "a substantial issue has been raised by the applicant", but it is common ground here that that initial test required for an interlocutory injunction has been met by the applicant.

5 I turn them to the question of irreparable damages and the question of balance of convenience. In this connection, Mr. Justice Potts at p. 3 of his decision says it is unclear to him whether the damages in question would be irreparable. He says the plaintiff's situation could be serious if it cannot meet its obligation with Sunoco. It seems to me that the highest that the applicant's case can be put is this: that if the injunction is not granted it will sell substantially less fuel oil. It will lose 20% of its actual capacity. This may or even probably will put it in default under an agreement which it made with Sunoco and this would put Sunoco in a position to call for the payment of some $800,000.00. There is a debenture or some other obligation which can be called by Sunoco in the event of a breach. Now, in dealing with this point, Mr. Justice Potts pointed out that this has not yet happened and he points out it may be that the acquisition of other customers will enable the applicant to require and to purchase from Sunoco amounts sufficient to meet those minimum requirements. He also points out that Sunoco has, as yet, taken no action such as apprehended and he says that "There is obviously some latitude for the plaintiff to mitigate its position." Mr. Crane says that the learned judge appears to have confused the matter of duty to mitigate damages with the test to be applied in the granting or withholding of an interlocutory injunction. For myself, I take that section of the reasons to mean merely that the impact of the alleged breach may be mitigated by Big Chief Petroleum getting other customers to the extent that it is not then in breach of its obligations to Sunoco.

6 Mr. Justice Potts has not touched upon a point which seems to me to be of some significance, and favours the respondent. My understanding of the word "irreparable" damage is that it is damage which cannot, in a nature of it, be compensated in damages. Mr. Justice Reid in one of the cases refers to the loss of life or the loss of custody of the child as irreparable damage. But there are a great many other losses which in my respectful view, are irreparable in the sense that a money award is not sufficient. I refer to the destroying of ornamental trees or ornamental buildings, the destruction of amenities which are enjoyed by the plaintiff and so on but, however that may be, it seems to me that the apprehended damage to be sustained by Big Chief is that it may suffer financial loss and perhaps very severe financial loss. It may conceivably be forced out of business, although there is no evidence of the financial strength of any of the parties here to warrant such conclusion. But the end result of that occurring as a result of a breach of contract by the respondent here would be an award of damages, and while the calculation of such damages may be difficult, it would seem to me not impossible. When one considers the difficulties in some cases of assessing damages, it seems to me that this calculation is not an insurmountable problem.

7 My conclusion then is that the plaintiff not necessarily "will", or, not necessarily "may" sustain irreparable damages; there is no evidence to indicate that the apprehended damages cannot be compensated for in a dollar award. I have gone some distance beyond what is required of me. I am not in the position called for by the Rule, in the condition of doubt as to correctness of the decision appealed from. I am not even a step below, that is, where I have good reason to doubt the correctness of the decision in the matter involved here. At its greatest, this case seems to involve the question of "may" or "will" in the Cyanamid test and it seems to me this has been adequately dealt with by our courts in previous decisions and it does not warrant, in itself, referring this matter to the Court of Appeal. I should close by saying that I am indebted to counsel and most particularly, Mr. Crane, who has addressed a most skilful argument, reducing a rather complex situation, involving a fair amount of material, to proportions which I think would be manageable by any judge and I thank him for that.

8 In the circumstances, the application for leave to appeal will be dismissed with costs to the defendant in the cause.

BARR J.

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