2012 NUCJ 9, 2012 NUCJ 9

nunavuumi iqkaqtuijikkut NUNAVUT COURT OF JUSTICE La Cour de justice du Nunavut Citation: Polar Supplies Ltd. v. Cape Dorset (Hamlet), 2012 NUCJ 09 Date: 20120613 Docket: 03-10-433-CVC Registry: Iqaluit Applicant: Polar Supplies Ltd. -and- Respondent: Municipal Corporation of the Hamlet of Cape Dorset ________________________________________________________________________ Before: The Honourable Madam Justice Tulloch Counsel (Applicant): Steven Cooper Counsel (Respondent): Sylvie Molgat Location Heard: Iqaluit, Nunavut Date Heard: April 12, 2012 Matters: Common law - Injunction Application REASONS FOR JUDGMENT (NOTE: This document may have been edited for publication)

Amended Decision: An amended decision was issued on August, 7, 2012; the corrections have been made to the text and the amendment is appended to this judgment. I. INTRODUCTION [ 1 ] The Applicant is a corporation that has carried on business in the Hamlet of Cape Dorset for a number of years.

It owns and operates a group of facilities and assets that includes those that do quarrying, gravel work, construction, demolition and transportation, and those that provide storage, accommodation and community infrastructural support. [ 2 ] The Applicant also rents equipment to the Hamlet of Cape Dorset so that it can deliver services to the community. [ 3 ] The relationship between the Applicant and the Respondent, the Hamlet of Cape Dorset (Cape Dorset), deteriorated after May of 2009, and a number of actions have been filed by the Applicant against the Respondent, three of which remain outstanding. [ 4 ] The Applicant is currently subject to a formal proposal under the Bankruptcy and Insolvency Act, RSC 1985, c B-3 .

It is required to make monthly payments beyond its daily operational expenses. If it fails to make these payments, it may be forced into bankruptcy by its creditors. [ 5 ] Garth Wallbridge is the Trustee of the Applicant in a Blind Trust Agreement dated January 1, 2010. Under this Agreement, Mr. Wallbridge has possession, control and legal title to 100 Class “A” Common shares, being all of the issued and outstanding shares of the Applicant. Mr. Wallbridge is required to manage the affairs of the Applicant. [ 6 ] The Applicant filed an affidavit from Mr. Wallbridge dated March 30, 2012.

Attached to that affidavit, as Exhibit A, is the Applicant’s Profit and Loss Statement from August 2010 through July 2011. [ 7 ] On April 12, 2012, the parties agreed that the First Action and the Third Action are to be consolidated. [ 8 ] In its substantive motion, the Applicant is asking the Court to issue a mandatory injunction and/or a quia timet injunction to compel Cape Dorset to cease doing private projects on private property without Ministerial Approval. II. PROCEDURAL BACKGROUND [ 9 ] The Applicant commenced action #03-10-165 (first action) against Cape Dorset on March 16, 2010.

It alleges Cape Dorset owed the Applicant $129,467 in arrears for work completed. It also alleges Cape Dorset breached a construction contract by removing the work from the Applicant and claims damages of $262,950. Finally, the Applicant claimed damages of $59,325 for wrongful interference in economic relations. [ 10 ] The Applicant commenced action #03-10-432 (second action) against Cape Dorset and others on July 5, 2010.

The Statement of Claim alleges that other parties, which provided accommodation in competition with the Applicant, breached the Hamlet of Cape Dorset, By-law No 34, Domestic Animals By-law, (20 December 1988) [Dog By-law], and created a nuisance. Cape Dorset was added as a Respondent because it was allegedly not enforcing the Dog By-law. The Applicant requested $25,000 in special damages for public nuisance and $25,000 in damages for private nuisance, as well as a permanent injunction.

[11] On July 5, 2010, the Applicant commenced action #03-10-433 (third action) against Cape Dorset, claiming damages of $36,480 forwrongful interference in economic relations and seeking a prohibitive injunction. On the same date, the Applicant filed a Notice ofMotion returnable on July 14, 2010, supported by an affidavit sworn by Ms. Constatineau on July 2, 2010, and requesting aninterlocutory injunction.

The motion was struck from the list because the Applicant was unable to serve some of the parties. [12] On December 15, 2010, this Court heard an application by the Applicant in the First, Second and Third Actions seeking to enjointhe Hamlet from its anticipated unlawful interference with the Applicant’s private sector work contracts (the first action). The Courtrecognized the inexperience of Mr. Olayuk Akesuk, SAO of the Hamlet, and denied the application for an interlocutory injunction. TheApplicant was invited to renew the application on “new evidence of irreparable harm” (Polar Supplies Ltd. V.

Cape Dorset (Hamlet),2011 NUCJ 5 at (WL) para 135, 2 CLR (4th) 18 [Polar Supplies v. Hamlet: First Application Decision]). [13] The First, Second and Third Actions are ongoing. [14] On or about June 27, 2011, the Hamlet received approval to provide gravel services to the privately owned Dorset Suites Hotelexpansion from the Minister of Community and Government Services in Nunavut. The Applicant commenced Action #03-11-437 CVCon July 7, 2011 (the Fourth Action), seeking judicial review of that approval and an injunction against the Hamlet. [15] The Fourth Action was resolved in favour of the Applicant.

The Court held that procedural irregularities and the fact that theApplicant had not been given notice of the Minister’s consideration of the issue were sufficient to quash the decision. However, aninjunction was not granted because the Hamlet had already completed the work by the time the decision was rendered (Polar SuppliesLtd. V. Cape Dorset (Hamlet) et al. 2011 NUCJ 30, 7 CLR (4th) 101 [Polar Supplies v. Hamlet: Fourth Action Decision]). III. ANALYSIS A. Should the Court issue an interlocutory or quia timet injunction against the Hamlet of Cape Dorset? (i).

The Test to be met [16] Both parties acknowledge that the Applicant must meet the three-pronged test set out in RJR-MacDonald Inc. v. Canada (AttorneyGeneral), (SCC), [1994] 1 SCR 311 at paras 78-81, 111 DLR (4th) 385 [RJR-MacDonald]. First, it must establish thatthere is a serious issue to be tried. Second, it must show that it will suffer irreparable harm. Finally, it must show that the balance ofconvenience favours the Applicant. A.i.1. Findings from the decision in the Third Action issued by Justice Earl D. Johnson on March 22, 2011.

Is there a serious issue to be tried? [17] Justice Johnson found that he was […]satisfied that Cape Dorset did carry out some work in the private sector in 2009 and 2010. Whether that work required Ministerialapproval depends upon the

interpretation of the relevant sections of the Hamlets Act. [p. 23, paragraph 65, Reasons for Judgment dated March 22, 2011] [18] Justice Johnson was satisfied that “the case at bar is one of the exceptions to the American Cyanamid test” [p.26, paragraph 76,Reasons for Judgment dated March 22, 2011]. As a result, he went on to carefully review the strength of the Applicant’s case in order toensure it met the prima face test. [19] Justice Johnson was “satisfied that the Applicant had satisfied the prima facie test with regard to most of the 2010 allegationsagainst Cape Dorset” [p.30, paragraph 94, Reasons for Judgment dated March 22, 2011].

This Court’s Conclusion on this branch of the test [ 20 ] Given the fact that the main action is still ongoing and the new evidence put forward in this application is similar to that which was alleged in the action dealt with by Justice Johnson in March of 2011, I conclude that there is a serious issue to be tried. [ 21 ] This part of the test has been met by the Applicant. A.i.2 Does the balance of convenience favour the Applicant? [ 22 ] Justice Johnson found as follows: In the case at bar, an injunction will have a limited impact on Cape Dorset but could potentially have a significant impact on the Applicant.

I am satisfied that the balance of convenience tips in favour of the Applicant … [p.31, paragraph 101, Reasons for Judgment dated March 22, 2011] This Court’s Conclusion on this branch of the test [ 23 ] This remains the case today and I am therefore satisfied that this part of the test has also been met by the Applicant.

A.i.3 Has the Applicant shown that it will suffer irreparable harm if the injunction is not granted in favour of the Applicant? [ 24 ] Justice Johnson dealt with this question in the previous action and stated as follows: I am satisfied that the Applicant will be harmed if Cape Dorset acts in a similar fashion in 2011 as it did in 2010. I am also satisfied that the Applicant’s bankruptcy would amount to irreparable harm.

As indicated at paragraph 42 of Golden Shell, it would be impossible to quantify damages in the event of a bankruptcy. [p.39, paragraph 130, Reasons for Judgment dated March 22, 2011] [ 25 ] Justice Johnson went on to find the following: The current evidence before me is not strong enough to satisfy me that the anticipated actions will cause the Applicant’s bankruptcy.

There is merit in Cape Dorset’s argument that there are too many contingencies. [P. 39, paragraph 131, Reasons for Judgment dated March 22, 2011] [ 26 ] On this part of the test to be met, Justice Johnson concluded as follows: “The application for an interlocutory injunction is denied, but may be renewed on new evidence of irreparable harm.” [p.41, paragraph 135, Reasons for Judgment dated March 22, 2011]. [ 27 ] Given the previous findings as noted above, counsel appropriately concentrated their arguments on this branch of the test to be met by the Applicant. B. Argument by the Applicant

[ 28 ]

Section 53.94 of the Hamlets Act requires strict compliance. It sets out what the Hamlet is permitted to do and s. 53.94(

c) explicitly indicates that, Where the exercise of the powers of the municipal corporation under subsection (1) would result in competition with similar services provided by the private sector, the approval of the Minister is required. [ 29 ] Cape Dorset has not been complying with their own Act and because of their non-compliance the Applicant has suffered irreparable harm. [ 30 ] The issue to be decided is whether a refusal to grant an interlocutory injunction could so adversely affect the applicant’s own interests that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the interlocutory application.

It is hard to predict with certainty what will happen if relief is not granted by the Court. [ 31 ] It is not the magnitude of the harm to be suffered but the nature of the harm that is at issue. In this case, bankruptcy would be prima facie evidence of irreparable harm. [ 32 ] The Applicant says that they must convince the Court that Polar Supplies may go bankrupt if the injunction is not granted and that it is the fault of Cape Dorset.

They must link the likelihood to the actions of Cape Dorset. [ 33 ] The actions of Cape Dorset for the past number of years continues to be unlawful and in contravention of the Hamlets Act. [ 34 ] The Applicant argues that Cape Dorset has an obligation to seek Ministerial Approval for the work they are currently doing including work done in relation to the Community Water and Sewage Service Agreement and the Community Maintenance Sub- Agreement. If they have not received said approval, they are providing the service unlawfully.

Even though they may have an obligation to provide the services, they have no authority to do so without Ministerial Approval. [ 35 ] The unlawful activity of Cape Dorset is causing economic distress to Polar Supplies which equals irreparable harm. (i).

What has changed since Johnson J.’s reasons for judgment dated March 22, 2011? [ 36 ] The dispute has not been resolved but has been diluted by the passage of time. [ 37 ] Further complaints have been filed against Cape Dorset by the Applicant alleging the same type of unlawful behaviour as before. [ 38 ] The current S.A.O. of Cape Dorset is no longer new and the previous finding that he acted in good faith no longer exists.

Nothing has changed and he is now three years into the job. [ 39 ] There is no undertaking given by Cape Dorset although Justice Johnson invited them to provide one in order to head off any new application. (ii). Argument of the Applicant [ 40 ] The following cases were put forward by the Applicant in support of the application.

[1] RJR-MacDonald Inc. v.

Canada, for the principal that the nature of the harm suffered rather than its magnitude is applicable. [2] Genesis Land Development Corp v Alberta, 2009 ABQB 221 at para 113, [2009] AWLD 3372, and Cheticamp Fisheries Coop Ltdv Canada, 1995 NSCA 24 , 139 NSR (2d) 224, 123 DLR (4th) 121 (CA), stand for the principle that unlawful interference witheconomic relations is actionable where there is an unlawful act committed with the intent to cause harm and economic harm results. [3] Leby Fixtures & Interiors Ltd. v The Bank of Nova Scotia and Gordon Shell Fisheries Ltd v Newfoundland (Minister of Fisheriesand Aquaculture) (200), (NL SC), 193 Nfld & PEIR 230 at para 42, 98 ACWS (3rd) 916 (SCTD), stand for theprinciple that it is impossible to quantify damages in the event of a bankruptcy.

If bankruptcy is possible, it is irreparable harm. TheCourt uses a standard which is below certainty.

It must look at the likelihood of bankruptcy. [4] In Victoria Marine v City of Victoria, 2000 BCSC 327 at (WL) para 15, 99 ACWS (3d) 325, Owen-Flood J. found that, “The dutyof the court is to strive to preserve matters in a state that will prevent prejudice to the Applicants pending resolution so as to enable thecourt to render a meaningful and effective judgment.” [5] Under Suntec Environmental Inc. and Trojan Technologies Inc., irreparable harm is not speculation when there is a risk that theApplicant will be forced out of business if the actions complained of are not stopped.

This is not mere speculation but instead is reality. [6] Kootenay Ice Hockey Club Ltd. v Slovak Ice Hockey Assn., 2001 BCSC 51, [2001] BCJ No 99, for the proposition that damagesare not an adequate remedy. Interim relief by way of interlocutory injunction may be necessary and appropriate where much can be lostif the injunction is not granted. [7] The Applicant argues that Fuller Western Rubber Linings Ltd. v Spence Corrosion Services Ltd., 2012 ABCA 92, [2012] AJ No271,is the most important case to be considered. It is a case decided by Mr.

Justice Peter Costigan who is a member of both the Nunavutand Alberta Courts of Appeal. It articulates the test as being that the Applicant must convince the Court that it may go bankrupt and ifthe Applicant is able to do that, then the test of irreparable harm is made out. C. Argument by the Respondent [41] The Respondent put forth the following contentions. [42] Granting an injunction would be an extraordinary remedy. [43] Only new facts can be considered on the relief sought.

On the new evidence, the Court must decide if a prima facie case has beenmade. [44] The Applicant’s evidence of irreparable harm is limited to its potential bankruptcy. [45] While the Applicant continues to allege that it will become bankrupt, the Affidavit filed by Garth Wallbridge shows: A. That Polar Supplies’ income for the period between July, 2010 and July, 2011, turned out to be approximately $300,000 higher thanprojected; B. That Polar Supplies currently has cash receivables of approximately $100,000, which it expects will meet its cash flow needs untilthe summer of 2012 construction season;

C. That Polar Supplies made a net profit of $56,125.12 over the last fiscal year. [ 46 ] Notwithstanding, Mr.

Wallbridge offers his opinion that an overall decrease in Polar Supplies ’ profits is due to the loss of tendered projects which are the direct result of having been underbid on those tenders by Cape Dorset and private sector competitors and further, that Polar Supplies’ reduced cash flow in 2012 as a result of any Hamlet competition “may” cause Polar Supplies to default under its Proposal and that Polar “may well” be forced into bankruptcy. [ 47 ] From a further review of the Profit and Loss Statement attached to Mr.

Wallbridge’s affidavit, it appears that the bulk of Polar Supplies’ income has nothing to do with Cape Dorset or the kind of work complained of. Their Income is largely due to the airline and hotel business and most of the expenses relate to payroll and professional fees. [ 48 ] The Applicant’s evidence continues to be too speculative at this point for the Court to consider the relief sought. [ 49 ] The mere possibility of bankruptcy does not equal irreparable harm.

The Applicant has to do more than allege a risk based on a double future contingency. [ 50 ] The Court must be careful in its consideration of an application to enjoin a statutory authority such as the Hamlet of Cape Dorset from doing what it is, by statute, empowered to do [Hart Leasing and Holdings]. [ 51 ] Since the last decision by Justice Johnson, Cape Dorset has taken considerable steps to make sure that Polar Supplies is contacted at any time when work is being requested that could possibly be completed by a private contractor such as the Applicant. [ 52 ] Polar Supplies is not the only private contractor in Cape Dorset that is able to provide services of the nature being complained about. (i).

Cases put forward by the Respondent [ 53 ] The following cases were put forward by the Respondent in support of their claim. [1] Perez v Bowen Island (Municipality), 2007 BCSC 998 at para 9 , 160 ACWS (3d) 1051 ,stands for the assertion that it is not appropriate for a court, hearing an application for an interlocutory injunction, to resolve disputes of fact arising from conflicting affidavits, nor to determine the case on its merits. [2] Under Smith v Inner London Education Authority, [1978] 1 All ER 41 (CA) , “A local authority should not be restrained by interlocutory injunction from exercising its statutory powers unless the Applicant has shown that there was a real prospect that he would succeed in his claim for a permanent injunction at the trial.” [3] Center Ice v National Hockey League, [1994] FCJ N. 68, at (QL) para 7, 46 ACWS (3d) 519 (FCA) , stands for the proposition that an Applicant must tender evidence of irreparable harm that is “clear and not speculative”. [4] Under Therriault v United Freight Services, Ltd., 2006 ABCA 350 at (WL) para 7, 153 ACWS (3d) 770, the prospect of bankruptcy does not constitute irreparable harm. [5] IMC Canada Ltd v Enron Canada Corp., 2001 ABQB 1121 at (WL) para 32, 318 AR 62, stands for the argument that irreparable harm should not be based on a double future contingency.

[6] Fort William Indian Bank v Thunder Bay (City), 136 ACWS (3d) 355 at para 66, 4 MPLR (4th) 255 (Ont Sup Ct), to support theposition that courts should take a wider viewpoint on the balance of convenience factor when considering the possible restraint of amunicipality from exercising its statutory powers. [7] Under Lubicon Lake Indian Bank v.

Norcen Energy Resources Ltd. (1995), 1985 ABCA 12 , 58 AR 161 at paras22, 33, [1985] WWR 193 (CA) [Lubicon Lake Indian Band] and Sports Authority, Inc. v Vineberg, [1995] FCJ No 622 at (WL) para 4,95 FTR 96, the standard of proof for a quia timet interim injunction is very high. D. Alleged new evidence of irreparable harm by the Applicant (i).

Affidavit of Cheryl Constantineau [54] According to the affidavit of Cheryl Constantineau dated Oct. 26, 2011 (summarized accordingly): [1] Dec. 31, 2010 – Polar Supplies witnessed a hamlet loader being used to lift snowmobiles at a privately owned Yamaha dealer.(Polar Supplies could have done the job for a profit of $504.) [2] Jan. 17 and 18, 2011 – Polar Supplies witnessed a hamlet employee working on a SSI satellite dish on private property.

The workwas done during normal business hours (Polar Supplies could have done the job for a profit of $3,360.) [3] Mar. 25, 2011 – Polar Supplies witnessed a hamlet loader being used to move containers for the Co-op. (Polar Supplies could havedone the job for a profit of $504.) [4] March 25, 2011 – Polar Supplies witnessed hamlet loaders removing snow from the driveway of the Dorset Suites Hotel. (PolarSupplies could have done it for a profit of $504.) [5] July 2011 – Polar Supplies witnessed gravel being supplied and spread on the parking lot of the Northern Store. (Polar Suppliescould have done the job for a profit of $1,501.) [6] August 2011 – Polar Supplies witnessed hamlet loaders removing empty containers from the Co-ops sea lift. (Polar Supplies couldhave done the job for a profit of $4,032.) [7] August 2011 – Polar Supplies witnessed hamlet loaders and dump trucks removing the HTA building for the Power Corp. (PolarSupplies could have done it for a profit of $15,120.) [8] August 2011 – Polar Supplies witnessed hamlet loaders and a hamlet dump truck demolishing buildings owned by Polar Supplies.(Polar Supplies could have done the job for a profit of $40,320.) [9] Starting in August 2011, Polar Supplies witnessed the expansion of a garage owned by the Hamlet.

The expansion is currentlybeing used to house school buses for the municipality. The garage space could have been provided by Polar Supplies which would havegenerated a profit in the amount of $2,500 per month. [10] September 2011 – Polar Supplies witnessed Hamlet equipment installing a gravel pad at the Cape Dorset Elementary School.(Polar Supplies could have done the work for a profit of $1,501.50.) [11] September 20 and 21, 2011 – Polar Supplies witnessed a Hamlet foreman operating a school bus as a replacement bus driver. (Polar

could have done the work for a profit of $798.) [12] October 7, 2011 – Polar Supplies was copied on an e-mail from the Hamlet— Exhibit. A—alleging unfair business practices on the part of Polar Supplies. [13] Oct. 15, 2011 – Polar Supplies witnessed a hamlet bulldozer being used to dig a trench at the site of the Dorset Suites expansion.

Polar Supplies also saw the Hamlet clearing and sanding the driveway of the same property. (Polar Supplies could have done the work and would have made a $1,008 profit.) [14] On or about Oct. 23, 2011, Polar Supplies witnessed screened gravel being transported from the Hamlet gravel pit to the site of the Dorset Suites expansion. Only Polar Supplies and Cape Dorset have the ability to screen gravel.

Polar believes that Cape Dorset is selling screened gravel to Dorset Suites. (Polar Supplies could have done the work and would have made a $4,987 profit.) [15] These actions have pushed Polar Supplies closer to bankruptcy.

Cape Dorcet continues to underbid on public sector work that Polar Supplies relies upon to maintain its viability as a business. [ 55 ] In the supplemental affidavit by Cheryl Constantineu, dated March 14, 2012 (summarized accordingly): [1] Throughout November of 2011, Polar Supplies witnessed Hamlet equipment being used to remove snow from parking lots owned by the GN. (Polar Supplies could have done the work for a profit of $44,100.) When confronted, Cape Dorset acknowledged an agreement between the GN and the Hamlet for Supplies to do this snow removal.

Polar Supplies was never offered the opportunity to do this work. [2] Jan. 3, 5 and 6, 2012 - Polar Supplies witnessed a Hamlet dump truck and two loaders clearing the snow at the high school and at Arctic College. The property is not owned by Cape Dorset. (Polar Supplies could have done the work for a profit of $16,537.50.) [3] Jan. 8-11, 2012 – Polar Supplies witnessed a hamlet dump truck and two loaders clearing snow at the Northern Beach parking lot and at White Row Apartments. These properties are not owned by Cape Dorset. (Polar Supplies could have done this work for a profit of $14,490) (ii).

Affidavit of Garth Wallbridge [ 56 ] The following information was provided in the Affidavit of Garth Wallbridge, dated March 30, 2012 (summarized accordingly): [1] The affidavit sets out the current financial state of Polar Supplies Ltd. pursuant to a Blind Trust Agreement dated January 1, 2010. [2] Attached to the affidavit is a Profit and Loss statement for the period of August 2010 to July of 2011. This statement shows a net profit of $56,125.12. [3] The net profit shown is less than what was projected and it is Mr.

Wallbridge’s professional opinion as a business owner and manager that this decrease is attributable to being underbid on work projects by the Hamlet of Cape Dorset and by other private sector competitors. [4] Reduced cash flow during 2012 as a result of any competition from the Hamlet may cause Polar Supplies to default under its bankruptcy proposal; Polar Supplies may well be forced into bankruptcy.

[5] Polar Supplies has observed a sharp decrease in its market share. The loss can only be attributed to the actions of the Hamlet which has entered the market and appropriated a substantial share for itself. [6] Polar Supplies is not aware of the Hamlet having obtained appropriate ministerial permission for its entrance in the market. (iii).

Affidavit of Olayuk Akesuk, S.A.O. of the Hamlet of Cape Dorset [ 57 ] In response, Olayuk Akesuk, S.A.O. of the Hamlet of Cape Dorset, provided the following in his Affidavit of April 3,2012 (summarized accordingly): [1] Cape Dorset has not bid on or engaged in any private sector contract or other work for which Ministerial approval would be required without such approval having first been obtained.

Since Dec. of 2010, Cape Dorset has been very careful not to engage in any activity which might possibly constitute private sector work and employees have been instructed to direct any inquiries to Polar Supplies. [2] Dec. 31, 2010 - lifting snowmobiles at the Yamaha dealer. Staff only worked until noon and there are no recollections of having lifted snowmobiles on that date. [3] January, 2011 – Cape Dorset did assist with the installation of a satellite dish for the Qiniq network. The dish was located on municipal lands and ensures wireless internet connectivity to the community.

Cape Dorset provided help at the request of SSi Micro who told the Hamlet that Polar Supplies could not do the job as their telehandler could not reach high enough. It was also necessary to put some gravel down to provide stability and Polar Supplies did not have a quarry permit. SSi Micro made arrangements to obtain Jamesie Alariaq’s telehandler but they needed an operator so Cape Dorset agreed to make Joe Ottokie available. He punched out from Cape Dorset in order to do the work and was paid by Mr.

Alariaq to operate the equipment. [4] March, 2011 - Cape Dorset purchased two empty sea containers from the Co-op which were picked up by Cape Dorset using its loader on or about March 25, 2011. [5] The Hamlet loaders did remove snow from the driveway of the Dorset Suites Hotel on or about March 25, 2011. They were clearing snow to service points in accordance with the Community Water and Sewage Agreement between Cape Dorset and the GN. [6] Keeping service points clear involves plowing the snow and laying down light gravel to ensure safe and unhampered access.

The Hamlet does so at the Dorset Suites Hotel and also at the Kingait Inn (owned by Polar Supplies). [7] When clearing snow for access to service points, Cape Dorset employees do only as much as is strictly required to ensure unhindered and safe access. [8] Cape Dorset sought ministerial approval regarding snow removal at the school and playground which was granted on June 6, 2011. [9] In May of 2011, Cape Dorset was advised of a drainage problem affecting the Northern Store parking lot.

Although Cape Dorset has always viewed the removal of snow build up in the area of the Northern Store as being a necessary part of maintaining the culvert, they sought ministerial approval and it was granted on June 6, 2011. [10] August 201 - Polar Supplies was hired to remove containers from the Co-op’s sealift. The Hamlet loader was also on the site as Cape Dorset was unloading its own sealift at the time. Some of the Co-ops containers were very heavy and Polar Supplies’ loader was unable to lift them.

Cape Dorset was asked to assist and they did so when asked. [11] The old HTO building was a safety hazard and with the consent of Cape Dorset HTO, Cape Dorset tore it down. The lot is not on

the site of the proposed power plant expansion and Cape Dorset did not carry out this work for the Nunavut Power Corp and was not paid to do so. [12] Cape Dorset also tore down two other buildings for the same reason. They were municipally owned and insured by Cape Dorset. [13] School buses belong to the DEA. Cape Dorset provides mechanical repair services because they employ the only mechanic in town. In exchange for sharing the costs of heat, electricity and fuel, Cape Dorset allows the DEA to store the school buses in their garage.

The arrangement has been in place with the DEA for some 25 to 30 years. [14] During the summer the DEA acquired a larger school bus. It was two feet longer and, therefore, it was necessary for Cape Dorset to expand the garage. The job was carried out by another private contractor. [15] September, 2011 - Cape Dorset has always maintained the grounds at Sam Pudlat Elementary School. They were asked for gravel and referred the school to Polar Supplies.

The school was not happy with the work or the bill for the same. [16] A Hamlet employee did work as a school bus driver for a couple of days as he was one of only three persons in the community licensed to do so at the time. Polar Supplies was approached first and quoted a price that was double the $30 per hour that the DEA regularly pays for this service. Cape Dorset did not charge the school and did not pay the driver who was paid directly by the DEA. [17] Oct, 2011 – the Cape Dorset bulldozer was driving past the Dorset Suites on or about Oct. 15, 2011 when they were asked to assist.

They dropped the D7’s ripper to loosen the ground and since it took less than half an hour, nothing was charged by Cape Dorset. [18] Any sanding at the Dorset Suites was done for the sole purpose of ensuring safe access to the service points. [19] Cape Dorset did not supply screened gravel for the Dorset Suites expansion on or about Oct. 23, 2011. The Dorset Suites had their own quarry permit and the gravel was taken from a stockpile.

The gravel was transported by the Dorset Suite’s telehandler and the dump truck belonging to Kingait. [20] Cape Dorset is responsible for maintaining the grounds and parking lots of certain GN owned buildings, including the High School and Arctic College. This was done during the area around North Beach and White Row between Jan 8 and 11, 2012, pursuant to the Community Water and Sewage Service Agreement. IV. CONCLUSION A.

Applying the law on interlocutory injunctions to the case at hand [ 58 ] An “interlocutory injunction” usually refers to an order restraining the respondent until trial or other disposition of the action. [ 59 ] Whether an injunction is termed interim or interlocutory, the effect is the same. The Court is exercising its civil power to restrain the activities of citizens.

The injunction is an extraordinary remedy and should only be granted in accordance with set principles. [ 60 ] The problem posed by interlocutory injunction applications may best be understood in terms of balancing, or withholding the remedy before full adjudication of the legal rights at issue. [ 61 ] In this case, Polar Supplies must show that there is a real risk that its rights will be irreparably infringed by Cape Dorset’s actions before the Court has rendered its judgment at trial. I must balance the risk of harm to Cape Dorset inherent in granting remedial relief

before the merits of the dispute can be fully explored against the risk that Polar Supplies’ rights will be significantly impaired in the time awaiting the trial. [ 62 ] The second factor in determining the appropriateness of an interlocutory and/or quia timet injunction is “irreparable harm”.

The Court has come to the conclusion that the first and third prongs of the test are met and therefore, if the Applicant satisfies this Court with respect to this second prong of the test, it has an obligation to grant the relief sought. [ 63 ] In order to do this, Polar Supplies must show that an immediate risk of harm will occur before the case reaches trial and that it cannot be compensated or remedied other than through the granting of the requested injunction. [ 64 ] Generally speaking, if damages after trial will provide adequate compensation and the Respondent is in a position to pay those damages, then ordinarily there will be no justification for granting an injunction pending the trial. [ 65 ] The term “irreparable” refers to the nature of the harm suffered rather than its magnitude.

Typical cases in which irreparable harm is likely to be found are those where the act complained of would put the party out of business, prevent the gaining of a livelihood, or cause irrevocable damage to reputation or professional standing. The Applicant in this case alleges that there is a risk of all of these things if an injunction is not granted. [ 66 ] The Federal Court of Appeal has said that proof of irreparable harm cannot be inferred (Centre Ice), and that the evidence must be clear and not speculative (Syntex Inc. v Novopharm Ltd., [1991] FCJ No 424 , (1991) 36 CPR (3d) 129 (FCA) .

The burden is on the applicant in cases where irreparable harm is alleged. [ 67 ] It is important to note that clear proof of irreparable harm is not required. Doubt as to the adequacy of damages as a remedy may support an injunction. Irreparable harm and the assessment of the balance of convenience are very closely linked. In some cases, where the balance of convenience strongly favours an injunction, conclusive proof of irreparable harm may not be required. [ 68 ] It is very clear that this Court must not and will not decide this issue by attempting to weigh the contradictory contents of the affidavits filed.

This Court does not have the benefit of cross-examination on any of the affidavits filed in support of this action. [ 69 ] I agree with the argument made by both counsel that they must convince the Court that Polar Supplies may go bankrupt and if they do, it is the fault of Cape Dorset.

They must link the likelihood of bankruptcy to the actions of Cape Dorset. [ 70 ] Given the fact that Justice Johnson, in the previous action for similar relief, felt that what little evidence there was consisted mainly of bald assertions which were much too speculative to establish irreparable harm, I must now look carefully at the new evidence provided in order to come to an appropriate decision with respect to whether or not I should grant an injunction at this stage in the proceedings. [ 71 ] There may or may not be any substance to the allegations contained in the affidavits filed.

There has been no cross examination and these new allegations also go to the issues to be decided at trial. [ 72 ] Although the affidavits of Ms. Constantineau and Mr. Akesuk do provide evidence that the relationship between the parties has not substantially improved, in order to grant an injunction in this case, the Court must be convinced that these actions on behalf of Cape Dorset may result in irreparable harm to Polar Supplies if an injunction is not granted. [ 73 ] I am of the view that Mr.

Akesuk, on behalf of Cape Dorset, is making an honest attempt to avoid further contravention of the Act and further complaints from Polar Supplies. The explanations he provides in response to these new allegations are at least plausible on their face and consistent with the actions of someone who is trying to comply. [ 74 ] The Court must also consider the affidavit of Mr. Wallbridge and if it is convinced that the Applicant may go bankrupt if the Court

does not grant an injunction against the Hamlet, then irreparable harm exists and the Court should grant the relief sought. [ 75 ] The key is that the Court must be able to link the actions of the Hamlet based on the new evidence provided and find that those actions constitute a real risk that Polar Supplies may go bankrupt unless I grant an injunction. [ 76 ] One question to be answered is: is it possible that the decrease in revenue being alleged by the Applicant could be the result of circumstances not directly related to the Hamlet of Cape Dorset? [ 77 ] On this point, it is clear from Mr.

Wallbridge’s affidavit at paragraph 5 that “Any loss of anticipated revenue sources makes payments more difficult and threatens Polar’s ability to meet its obligations.” [ 78 ] There is an admission in the affidavit that there are other private sector competitors which could contribute to reduced profits by Polar Supplies (Wallbridge affidavit at para 12). [ 79 ] Justice Johnson found that the Applicant was already in financial difficulty before the alleged unlawful actions of the Respondent (Reasons for Judgment dated March 22, 2011 at para 111). [ 80 ] This Court is not fully convinced by the new evidence provided that irreparable harm would result if an injunction is not granted. [ 81 ] The affidavits are contradictory on every point made and it is for the trial judge to decide whether the Applicant is successful in their application for relief from the Hamlet after witnesses have been called and evidence has been appropriately assessed. [ 82 ] On all the evidence provided, I conclude that I am not satisfied that the Hamlet has breached the Act because I am unable to resolve the conflicts in the affidavits.

Assuming, however, that the Hamlet did breach the Act, I am not satisfied that the actions will cause irreparable harm. [ 83 ] The application for an interlocutory and/or quia timet injunction is denied. B.

Ruling [ 84 ] The Court is concerned that complaints continue to be forthcoming between the parties and, although the current allegations do not merit interlocutory relief, there is no doubt that they do increase the cost of litigation and result in considerable uncertainty overall. [ 85 ] Although the Court is not prepared to grant an injunction at this time, Johnson J.’s suggestion that the Respondent in this case should provide a well drafted undertaking to Polar Supplies indicating on what terms it is prepared to desist from the conduct being complained of should merit further consideration.

Setting out clear terms in such an undertaking upon agreement by the parties would go a long way to ensure that further action and further cost to the parties, short of trial, will not be forthcoming. [ 86 ] Given the ongoing acrimony between the parties, an undertaking may be impossible to draft on consent.

That being said, continuing litigation of an interlocutory nature instead of proceeding to trial or Alternative Dispute Resolution (ADR) is not in anyone’s best interest. [ 87 ] If an undertaking is not a viable solution at this point in the litigation, then the parties should seriously consider looking at judicial dispute resolution alternatives. [ 88 ] I reserve the question of costs to the discretion of the trial judge.

Dated at the City of Iqaluit this 13th day of June, 2012 ___________________ Justice B. Tulloch Nunavut Court of Justice _______________________________________________________ Amendment of the Reasons for Judgment Reserved of The Honourable Madam Justice Tulloch _______________________________________________________ In paragraph [54] the pinpoint of “[15] These actions have pushed Polar Supplies closer to bankruptcy.” has been changed from Paragraph 55 to Point 15 of the Constantineau affidavit dated Oct. 26, 2011 referenced in paragraph 54.

Paragraph 55 now starts “[55] In the supplemental affidavit by Cheryl Constantineu, dated March 14, 2012…” In paragraph [69] (formally paragraph 70) – the term “Applicant” has been changed to “both” Please replace the amended pages in your hard copy of the judgment.