Maxwell Properties Ltd. v. Mosaik Property Management Ltd., 2017 NSCA 76

Nova Scotia Court of Appeal Citation: Maxwell Properties Ltd. v. Mosaik Property Management Ltd. , 2017 NSCA 76 Date: 20170608 Docket: CA 461951 Registry: Halifax Between: Maxwell Properties Limited Respondent by Cross-Appeal v. Mosaik Property Management Limited, George Giannoulis, Stavros (“Steve”) Giannoulis and J L Silver Construction Incorporated Appellants by Cross-Appeal Judge: The Honourable Justice Peter M. S. Bryson Appeal Heard: June 8, 2017, in Halifax, Nova Scotia Written Release: September 20, 2017 Subject: Torts. Trespass. Interlocutory injunction. Fresh evidence.

Summary: Mosaik’s hanging staging encroached on Maxwell’s airspace. Maxwell obtained an interlocutory injunction, which the judge suspended for three months to allow Mosaik to complete its external cladding work. Maxwell appealed the suspension of the injunction and Mosiak cross-appealed. Maxwell later dropped its appeal. Mosaik argued that the judge erred in treating the overhanging staging as a trespass, rather than a nuisance.

Mosaik also submitted that the judge erred in his application of the interlocutory injunction test by finding an arguable issue, irreparable harm and that the balance of convenience favoured Maxwell. Maxwell also sought to introduce fresh evidence of ongoing difficulties following the granting of the injunction. Issues:

(1) Should fresh evidence be admitted?

(2) Was the overhanging staging a nuisance or trespass?

(3) Was there a serious issue to be tried?

(4) Was there irreparable harm?

(5) Did the balance of convenience favour granting the injunction? Result: Fresh evidence motion dismissed. Leave to cross-appeal granted and cross-appeal allowed. Judge did not err in categorizing Mosaik’s hanging staging as a trespass, rather than a nuisance. It was unsound to transform the cause of action from trespass to nuisance to better accommodate a desired outcome because nuisance required proof of damage and trespass did not. Nevertheless, the three-part American Cyanamid interlocutory injunction test did not favour granting an injunction.

There was an issue for trial regarding trespass and whether there had been any agreement respecting it. The judge erred by considering that difficulty in calculating damages constituted irreparable harm. He found any interference of Maxwell’s use and enjoyment of its property was “virtually non-existent”. He did not weigh the benefit and burden to the respective parties when considering balance of convenience. That balance favoured Mosaik. This information sheet does not form part of the court’s judgment. Quotes must be from the judgment, not this cover sheet. The full court judgment consists of 18 pages.

Nova Scotia Court of Appeal Citation: Maxwell Properties Ltd. v. Mosaik Property Management Ltd. , 2017 NSCA 76 Date: 20170608

Docket: CA 461951 Registry: Halifax Between: Maxwell Properties Limited Respondent by Cross-Appeal v. Mosaik Property Management Limited, George Giannoulis, Stavros (“Steve”) Giannoulis and J L Silver Construction Incorporated Appellants by Cross-Appeal Judges: Fichaud, Bryson and Van den Eynden, JJ.A.

Appeal Heard: June 8, 2017, in Halifax, Nova Scotia Written Release: September 20, 2017 Held: Leave to cross-appeal granted; fresh evidence motion dismissed; cross-appeal allowed with costs of $2,500, inclusive of disbursements, per reasons for judgment of Bryson, J.A.; Fichaud and Van den Eynden, JJ.A. concurring Counsel: Nancy Rubin, Q.C. and Jeffrey Waugh, for the respondent by cross-appeal Dillon Trider, for the appellants by cross-appeal Reasons for judgment: Introduction [ 1 ] What happens when the pressures of urban development conflict with traditional protection of the rights of property?

The parties recognize that tension and propose different resolutions to the apparent conflict. [ 2 ] Mosaik Property Management Ltd. was developing its commercial property on the corner of Sackville and Market Streets in Halifax. Maxwell Properties Ltd. owns a neighbouring property to the east at 1580 Grafton Street. The properties lie east of the Citadel within the original 1749 town, built to a Georgian grid typical of the era. The proximity of the properties in this area maximize both lot coverage and neighbourly forbearance.

Unfortunately for Mosaik, that forbearance was unforthcoming from Maxwell which was unprepared to tolerate encroachments on and above its building, occasioned by Mosaik’s construction. Maxwell brought an application for an interlocutory injunction to stop the encroachments. [ 3 ] Maxwell sought an injunction because Mosaik was adding to an existing structure and was installing external cladding on the wall overlooking the roof of Maxwell’s building. Maxwell complained that a fence on its roof had been used by Mosaik’s contractors to support a temporary walkway or scaffolding.

Maxwell says that Mosaik’s workers trespassed on its roof; that some debris fell on the roof; and that cranes, hoists and building materials were overhanging its building.

Apart from a general denial, Mosaik argued de minimis interference, saying any airspace intrusion did not exceed eighteen inches. [ 4 ] The Honourable Justice Glen McDougall granted the injunction, but suspended it for three months to allow Mosaik to “finish its work” and to “allow the parties to try to come to some arrangement”, ( 2017 NSSC 81 , ¶ 21 , 23). [ 5 ] The judge seems to have been satisfied that scaffolding did rest on Maxwell’s rooftop fence and ordered it removed.

Mosaik was given three months to complete its cladding work, which meant that its staging would continue to slightly overhang the airspace above Maxwell’s roof during that time.

[6] Maxwell appealed the suspension, and Mosaik sought leave to cross-appeal the injunction. When it was unsuccessful instaying the suspension, Maxwell dropped its appeal. So, this appeal has been confined to Mosaik’s challenge of the interlocutoryinjunction. [7] Maxwell applied to lead fresh evidence on Mosaik’s cross-appeal. [8] Mosaik claims the judge made four mistakes: (

a) He erred in treating the intrusions into Maxwell’s airspace as a trespass instead of a nuisance. (

b) He erred in determining that there was a serious issue to be tried. (

c) He misapplied the test for irreparable harm. (

d) He misapplied the test for balance of convenience. [9] After hearing oral argument, the Court granted leave to cross-appeal and allowed the cross-appeal, with reasons to follow. These are they. [10] Before considering the grounds of appeal, it will be convenient to address the fresh evidence motion. Then follows anoverview of interlocutory injunctions. Fresh evidence motion [11] Maxwell wants to submit new evidence in response to Mosaik’s cross-appeal. Maxwell offers the affidavit of its VicePresident, Louie Lawen, describing events since the injunction was granted. Mr.

Lawen hired a contractor to “repair and replace”Maxwell’s fence on its roof. He then called the appropriate government department to express “concerns” relating to Mosaik’s“unprotected swing stage” (presumably above Maxwell’s fence). A temporary stop work order was issued to Maxwell’s contractor,lifted on condition that work times between the respective contractors be coordinated “to ensure workers’ safety”. [12] This Court applies the Palmer test when considering fresh evidence applications, (R. v. Palmer, (SCC), [1980] 1S.C.R. 759; MacNutt v. Acadia University, 2017 NSCA 57; C.F. v.

Nova Scotia (Minister of Community Services), 2017 NSCA 56). OurCourt has not distinguished between cases on final appeal and interlocutory appeals when applying Palmer, (i.e., Kirby v. Dominion ofCanada General Insurance Company, 2008 NSCA 14). There is Supreme Court authority for applying Palmer less strictly ininterlocutory appeals because the parties do not have the same opportunity to marshal all the evidence, as at trial (Amchem Products Inc.v. British Columbia (Workers' Compensation Board), [1992] S.C.J. No. 110, per Sopinka J. at ¶ 6). Other appeal courts have taken thisview (i.e. Garcia v.

Tahoe Resources Inc., 2017 BCCA 39; Sawridge Band v. Canada, 2006 CAF 52; Succession de feu André Gauthierv. Coutu, 2006 NBCA 16). [13] Rule 90.47 authorizes the Court to consider fresh evidence. It does not distinguish between interlocutory and final appeals: Giving evidence to the Court of Appeal 90.47

(1) The Court of Appeal, on the motion of a party, may on special grounds authorize evidence to be given to the Court of Appealon the hearing of an appeal on any question as it directs.

(2) The evidence may be given through oral examination before the Court of Appeal or by affidavit or deposition, or as the Court ofAppeal directs.

(3) The Court of Appeal on an appeal may on special grounds inspect or view any place, property or thing. [14] The Palmer criteria require that the fresh evidence: 1. should not be admitted if by due diligence it could have been admitted at trial; 2. bears on a decisive or potentially decisive issue; 3. be credible; 4. if believed, could reasonably be expected to have affected the result; 5. be in admissible form (Armoyan v. Armoyan, 2013 NSCA 99, ¶ 131). [15] The fresh evidence application is dismissed because it adds nothing legally new or factually decisive.

The trespass representedby Mosaik’s overhanging staging was already in evidence, and indeed confirmed by the judge’s findings. The interference withMaxwell’s property rights was apparent and is not transformed by the example supplied by this evidence. [16] Maxwell’s submission that the evidence should not be disregarded because it merely strengthens its position, and the judge’sliability finding, is only pertinent if it could have affected the result, particularly if Mosaik’s nuisance versus trespass argument issuccessful. For reasons that follow regarding the first ground of appeal, it is not.

Overview of interlocutory injunctions

[17] The Judicature Act, R.S.N.S. 1989, c. 240, s. 43(9) authorizes the granting of injunctions: 43(9) A mandamus or an injunction may be granted or a receiver appointed by an interlocutory order of the Supreme Court, in all casesin which it appears to the Supreme Court to be just or convenient that such order should be made, and any such order may be made eitherunconditionally or upon such terms and conditions as the Supreme Court thinks just, and if an injunction is asked, either before or at orafter the hearing of any cause or matter, to prevent any threatened or apprehended waste or trespass, such injunction may be granted ifthe Supreme Court thinks fit, whether the person against whom such injunction is sought is, or is not, in possession under any claim oftitle or otherwise or, if out of possession, does or does not claim a right to do the act sought to be restrained, under any colour of title, andwhether the estates claimed by both or by either of the parties are legal or equitable. [18] Rule 41.04 elaborates: 41.04

(1) A party who files an undertaking as required by Rule 41.06 may make a motion for an interim injunction or interimreceivership.

(2) A judge who is satisfied on all of the following may grant the motion: (

a) the party claims an injunction or receivership as a final remedy in the proceeding, or it is in the interests of justice that an injunctionor receivership be in place before determination of the claims in the proceeding; (

b) the party has moved, or will move, for an interlocutory injunction or interlocutory receivership and is proceeding without delay; (

c) an urgency exists and it cannot await the determination of the motion for an interlocutory injunction or interlocutory receivership; (

d) considering all of the circumstances, it is just to issue an order for an interim injunction or interim receivership. [19] Quoting the House of Lords, Sharpe, Injunctions and Specific Performance, looseleaf edition, (Toronto, Canada Law Book,November 2016), at ¶ 1.1120 remarks that the equitable jurisdiction to grant injunctions predates the Judicature Acts of the nineteenthcentury: As the House of Lords pointed out: “The power of a judge sitting in the High Court to grant an injunction . . . is confirmed by, but doesnot derive from [statute] . . .

It derives from the pre Judicature Act 1873 powers of the Chancery courts, and other courts, to grantinjunctions.” [20] At one time, interlocutory injunctions would only be granted if the applicant showed a prima facie case on the merits. Becausean interlocutory injunction involves an order against a party prior to the trial on the merits, this stricter test seems sound theoretically andwise in practice. However, the delay inherent in a trial on the merits may deprive the successful party of the fruits of victory.

In suchcases, interlocutory injunctions may have the salutary effect of preserving the status quo or preventing irreparable harm, until the meritscan be determined. [21] The prima facie test was discarded by the House of Lords in American Cyanamid Co. v. Ethicon Ltd., [1975] AC 396. TheSupreme Court of Canada endorsed American Cyanamid in RJR - MacDonald Inc. v. Canada (Attorney General), (SCC), [1994] 1 S.C.R. 311 observing at p. 335: [44] . . . The American Cyanamid standard is now generally accepted by the Canadian courts, subject to the occasional reversion to astricter standard: see Robert J.

Sharpe, Injunctions and Specific Performance (2nd ed. 1992), at pp. 2-13 to 2-20. [22] There are important exceptions to the American Cyanamid test, but they are not pertinent in this case. [23] Courts entertaining an interlocutory injunction generally now will address: (

a) the merits of the case; (

b) irreparable harm; (

c) the balance of convenience. The judge did so in this case. The chambers judge did not err in treating Maxwell’s airspace intrusions as a trespass instead of a nuisance [24] This Court addressed the trespass – nuisance distinction in Canada (Attorney General) v. MacQueen, 2013 NSCA 143 at ¶ 86: [86] The appellants emphasise that the quality of directness is paramount and distinguishes trespass from nuisance, citing thisCourt’s decision in W. Eric Whebby Ltd. v.

Doug Boehner Trucking & Excavating Ltd., 2007 NSCA 92 at ¶127–130: [127] However, these submissions overlook a more fundamental point which, in my view, is fatal to United’s position: nuisance isconcerned with unreasonable interference with the enjoyment of land resulting from another’s conduct elsewhere. The interference withthe plaintiff’s enjoyment of land must be indirect rather than direct: see, e.g. Linden and Feldthusen at 559 - 560; Beth Bilson, TheCanadian Law of Nuisance (Toronto: Butterworths, 1991) at 14.

As the editor of Street on Torts put it in a passage cited withapproval in Royal Anne Hotel Co. v. Ashcroft, (BC CA), [1979] 2 W.W.R. 462 (B.C.C.A.), a person commitsprivate nuisance when he or she “... is held to be responsible for

an act indirectly causing physical injury to land or substantiallyinterfering with the use or enjoyment of land or of an interest in land ....”: Margaret Brazier, Street on Torts, 8th ed. (London,Edinburgh: Butterworths, 1988) at 314 - 315 (emphasis added). See also Hunter v. Canary Wharf Ltd., [1997] A.C. 655 (H.L., Eng.). Here, the damage was direct, not indirect; Whebby dumped the soil on United’s land.

[128] The requirement for indirect rather than direct interference is not dependent on the defendant’s status in relation to the landwhere the nuisance originates.

On the question of what that status must be, there is a division of opinion: does the defendant have to bean owner or an occupier, or may he or she be simply a user or even a trespasser? … Whatever the answer to that question may be, thereis virtually no doubt that nuisance is concerned with indirect, not direct, interference with the plaintiff’s enjoyment of his or her landin the sense that the interference must originate elsewhere than on the affected land itself. … [Citations omitted] … [130] This view is also consistent with first principles going back to the old forms of action.

That nuisance deals with indirectinterference may be traced to the distinction between an action in trespass and an action on the case. Trespass is direct entry onanother’s land while nuisance is the infringement of the plaintiff’s property interest without direct entry by the defendant: see, forexample, John G. Fleming, The Law of Torts, supra at 464 - 465; Clerk and Lindsell on Tort, supra at 20-02; John P. S. McLaren,“Nuisance in Canada” in Allen M.

Linden, Studies in Canadian Tort Law, (Toronto: Butterworths, 1968) 320 - 377 at 338. [Emphasisin italics added, underlined emphasis in original] [Emphasis added] [25] Mosaik says that its hanging staging encroaching on Maxwell’s airspace was temporary and that “the resulting damage . . . wasnot likely to be more than minimal and any interference with Maxwell’s use and enjoyment of its property was virtually non-existent.” Mosaik goes on to say that this temporary airspace intrusion ought to be treated as a nuisance; that a trespass must be permanent and/orinterfere with actual or potential possession, use and enjoyment of property. [26] Mosaik’s focus on the cause of action appears to have a remedial objective.

Because trespass is actionable without proof ofdamage, and an injunction is the presumed remedy for a trespass, Mosaik prefers characterizing the conduct here as a nuisance which isonly actionable on proof of damage, (i.e. MacQueen, ¶ 84, 85). Presumably, Mosaik has a greater prospect of success in resistinginjunctive relief if the cause of action is nuisance, rather than trespass. Maxwell appears to concede the cause of action point, but arguesthat we should distinguish between temporary and transient interference; the former constituting a trespass, the latter, a nuisance.

It saysMosaik’s conduct was a temporary trespass and should have been enjoined. [27] Mosaik faults the judge for applying the decision of Lewvest Ltd. v. Scotia Towers Ltd., [1981] N.J. No. 220 (Nfld SC TD),which granted an injunction precluding intrusions into Lewvest’s airspace by Scotia Towers’ construction crane, based on trespass. Mosaik says that Lewvest has not been followed elsewhere.

But the judge considered these arguments: [8] The defendants also submit that injunctive relief should be denied on the basis of caselaw characterizing temporary incursionsinto airspace by construction equipment as nuisances: see Janda Group Holdings Inc. v. Concost Management Inc., 2016 BCSC 1503;Kingsbridge Development Inc. v. Hanson Needler Corp. (1990), (ON SC), 72 O.R. (2d) 159 (Ont. S.C.); and Didow v.Alberta Power Ltd., 1988 ABCA 257. These cases involved temporary construction cranes, in Janda and Kingsbridge, and the cross-arms and wires of power poles, in Didow.

The court in Didow distinguished, on the basis that the trespass by the permanent power poleswas not comparable to the temporary intrusions by cranes, which the court suggested would better be characterized as nuisance.

At thehearing, counsel for the plaintiff produced several Commonwealth cases in support of the contrary view. [9] Even if I were to accept the distinction suggested by the defendants, it appears to me that the intrusion in this case is not entirelycomparable to an overpassing crane since it involves fixed, albeit temporary, objects as well as ongoing work that, at times, hasapparently led to some falling of debris and materials directly onto the plaintiff’s building.

I am satisfied based on the authorities,including Lewvest, that this situation is properly treated as one of trespass. [28] Nevertheless, we are urged to prefer Didow v. Alberta Power Ltd., 1988 ABCA 257, and cases endorsing it, that temporaryairspace intrusions be treated as a nuisance, rather than a trespass. [29] Didow cites an apparently unhelpful passage from Lord Bernstein of Leigh v. Skyviews & General Ltd., [1977] 2 All E.R. 902 at906: I do not wish to cast any doubts on the correctness of the decision on its own particular facts.

It may be a sound and practical rule toregard any incursion into the air space at a height which may interfere with the ordinary user of the land as a trespass rather than anuisance. Adjoining owners then know where they stand; they have no right to erect structures overhanging or passing over theirneighbours' land and there is no room for argument whether they are thereby causing damage or annoyance to their neighbours aboutwhich there may be much room for argument and uncertainty.

But wholly different considerations arise when considering the passageof aircraft at a height which in no way affects the user of the land. [Emphasis added] [30] Skyviews affirms the traditional rule that airspace intrusion is a trespass, but Skyviews and other cases considered in Didowquestion the correctness and utility of the Latin maxim, “Cujus est solum ejus est usque ad caelum et ad infernos”, a practicalinterpretation of which is “he who owns the land, owns what is below and above to indefinite extent.” We need not be detained by thatdebate where the airspace intrusion here potentially affects Maxwell’s use and enjoyment of the airspace above its building, exemplifiedby Mosaik’s own use of that space. [31] While the practical outcome in Didow makes sense, its analysis following extensive review of the case law, is not persuasive: [39] The two concepts which become apparent are firstly that the courts will not give literal effect to the latin maxim and secondly,the proper remedy for interference with a land owner’s air space with a permanent fixture is in trespass as opposed to nuisance. [40] In my opinion, the balancing criterion formulated by Griffiths, J. is a logical compromise to the rights of the landowner and thegeneral public.

It is a test I adopt. I view this test as saying a land owner is entitled to freedom from permanent structures which in any

way impinge upon the actual or potential use and enjoyment of his land. The cross arms constitute a low level intrusion which interfereswith the appellant’s potential, if not actual, use and enjoyment. This amounts to trespass. [41] For the sole purpose of comment I refer to the cases of Woolerton and Wilson v. Richard Costain Ltd. [1970] 1 All E.R. 438 andLewvest Ltd. v.

Scotia Towers (1981) (NL SCTD), 126 D.L.R. 239, where, in each instance, it was held that anoverhanging crane used in the construction of a building trespassed a land owner’s air space, notwithstanding that the cranes were notpermanent intrusions. In light of the distinction now recognized in encroachment cases between nuisance and trespass my inclinationwould be to characterize the overhanging cranes as a nuisance. [Emphasis added] [32] It is not obvious from the foregoing emphasis how airspace intrusion, characterized as a trespass, suddenly becomes anuisance.

But the practical advantage of a finding of nuisance is that damage must be proved, and an injunction is not automatic: soconstruction may proceed. No doubt that outcome attracted the Court in Didow and its fellow travellers. [33] Respectfully, it is analytically inconsistent and practically unwise to compromise the cause of action to achieve a desiredremedial outcome. Equitable discretion involving injunctions is exercised in relation to the relief sought, not the cause of actionpleaded.

Injunctions are creatures of equity and there is an obvious difference between remedying the wrong of routinely crossingsomeone’s garden to reach the street and constructing a commercial building next to others, accompanied by temporary airspaceincursions. The case for an injunction is compelling in the first instance; it need not be in the second. That is especially so whereinterlocutory injunctive relief is sought to enjoin a temporary and unobtrusive trespass because of the balancing which the AmericanCyanamid test requires. [34] Permanent injunctions to enforce property rights are the norm.

Citing Sharpe, the Ontario Court of Appeal explains why in1465152 Ontario Ltd. v. Amexon Development Inc., 2015 ONCA 86: [23] As the law in Ontario currently stands, different considerations apply in the latter circumstance, as was explained in Robert J.Sharpe, Injunctions and Specific Performance, loose-leaf (consulted on 30 January 2015), (Toronto: Canada Law Book, 2014), at 4.10and 4.20: Where the plaintiff complains of an interference with property rights, injunctive relief is strongly favored. This is especially so in thecase of direct infringement in the nature of trespass. ...

The reason for the primacy of injunctive relief is that an injunction more accurately reflects the substantive definition of propertythan does a damages award. It is the very essence of the concept of property that the owner should not be deprived without consent. Aninjunction brings to bear coercive powers to vindicate that right. Compensatory damages for a continuous and wrongful interference witha property interest offers only limited protection in that the plaintiff is, in effect, deprived of property without consent at an objectivelydetermined price.

Special justification is required for damages rather than an injunction if the principle of autonomous control overproperty is to be preserved. A damages award rather than an injunction permits the defendant to carry on interfering with the plaintiff’sproperty. [Footnotes omitted.] [Emphasis added] [35] The point is more emphatically made in Woolerton and Wilson v. Richard Costain, [1970] 1 W.L.R. 411 at p. 413, a case onwhich Maxwell relies: It is in my judgment well established that it is no answer to a claim for an injunction to restrain a trespass, that the trespass does noharm to the plaintiff.

Indeed, the very fact that no harm is done is a reason for rather than against the granting of an injunction: forif there is no damage done the damage recovered in the action will be nominal and if the injunction is refused the result will be no morenor less than a licence to continue the tort of trespass in return for a nominal payment. [Emphasis added] [36] However, it may not always be the case that damages will be nominal – thus favouring injunctive relief (see ¶ 40 below). [37] But even where the injunction sought is permanent and the plaintiff’s right is clear, courts may exceptionally refuse this relief(i.e.

Sharpe, 4.620-4.670). That discretion is even more available in an interlocutory setting, with the attendant balancing required. In acommercial context, involving a minor temporary trespass, it may be “in the interests of justice” to refuse an injunction and leave theapplicant to a remedy in damages. [38] Plainly, granting an injunction improves Maxwell’s bargaining position, while refusing it does the same for Mosaik. Maxwellmay have been using its proprietary rights to exert commercial pressure on Mosaik.

But they are Maxwell’s proprietary rights to use. [39] Equally, however, the law encourages a reasonable “give and take”, particularly in high density circumstances where someaccommodation may be expected arising from the forced intimacy of urban development. Cases recognizing this principle include: Woolerton; Bertram v. Builders’ Association of North Winnipeg (1915), (MB KB), 23 D.L.R. 534 (Man. K.B.);Leader v. Moody

(1875) L.R. 20 Eq. 145 at 153; Janda Group Holdings Inc. v. Concost Management Inc., 2016 BCSC 1503; Hanson-Needler Corp. v. Kingsbridge Development Inc., [1990] O.J. No. 1070 (Ont. CA); and Didow (although the last three Canadian casestreat the airspace encroachment as a nuisance). In such a case as this, the judge’s finding of temporary and minor inconvenience toMaxwell favour a remedial outcome that recognizes Maxwell’s right in damages, but does not sterilize – or render financially prohibitive– development of Mosaik’s property.

[ 40 ] That does not mean that damages need be nominal. It may be that the commercial benefit to the defendant has some relevance, where it is made available through use of the applicant’s property because it can be indicative of what the interloper may be prepared to pay for that benefit, (see, for example, Sharpe, 4.670 and dicta in Lawrence and Another v. Fen Tigers Ltd. and Others , [2014] 2 All E.R. 622 at ¶ 100 and following – a nuisance, but citing at ¶ 111, Jaggard v. Sawyer , [1995] 2 All E.R. 189 – a trespass case). But these are issues for another day.

The point is that equitable discretion to grant an injunction is usually – but not invariably – exercised to vindicate property rights. The general rule favouring a permanent injunction does not relieve the court of the need to apply the balancing test in interlocutory cases (and see: Cambie Surgeries Corp. v. British Columbia (Medical Services Commission) , 2010 BCCA 396 ; 1711811 Ontario Ltd. v. Buckley Insurance Brokers Ltd. , 2014 ONCA 125 ; Northumberland Fisherman’s Association v. Patriquin , 2015 NSSC 30 ).

The judge did not err in determining that there was a serious issue to be tried [ 41 ] In American Cyanamid , Lord Diplock described the threshold test—consideration of the merits—in the following way: The court no doubt must be satisfied that the claim is not frivolous or vexatious ; in other words, that there is a serious question to be tried . . . . unless the material available to the court at the hearing of the application . . . fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider [irreparable harm and] balance of convenience . . . [Emphasis added] [ 42 ] The Supreme Court embraced this language in RJR - MacDonald noting that the threshold test “is a low one”. [ 43 ] Mosaik argues that the chambers judge failed to conduct a “preliminary assessment” of the merits of Maxwell’s case as required by RJR - MacDonald Inc. where the Court offered: [49] What then are the indicators of “a serious question to be tried”?

There are no specific requirements which must be met in order to satisfy this test. The threshold is a low one. The judge on the application must make a preliminary assessment of the merits of the case. . . . [50] Once satisfied that the application is neither vexatious nor frivolous, the motions judge should proceed to consider the second and third tests, even if of the opinion that the plaintiff is unlikely to succeed at trial.

A prolonged examination of the merits is generally neither necessary nor desirable. [Emphasis added] [ 44 ] After citing RJR – MacDonald , the judge observed: [12] Applying the RJR-MacDonald factors, the plaintiff submits that the trespass constitutes an unjustified interference with its exclusive possession of its property and, therefore, amounts to a serious issue to be tried.

The plaintiff argues that the defendants have, without permission, “effectively expropriated” its property for the purpose of “advancing their construction of their own building.” Plaintiff’s counsel argues that the law aggressively protects private property rights and cites the maxim that “a man’s home is his castle.” I accept that such interference with a property right amounts to a serious issue to be tried. [ 45 ] The judge cannot be faulted for concluding that there was a serious question of property rights to be tried—indeed the submissions of both parties assume as much. [ 46 ] Mosaik’s argument that Maxwell agreed to the encroachments in return for a charitable donation to a church—contested by Maxwell—simply reinforces the judge’s finding that there were issues to be tried. [ 47 ] Finally, the argument that Maxwell should be denied equitable relief because it does not come to court with “clean hands”, owing to alleged negotiating intransigence, is not compelling.

Why should Mosaik’s tortious behaviour trigger an obligation by Maxwell to negotiate? Absent an obligation to negotiate, that argument is flawed in principle because it would impair access to the courts by discouraging forthright advocacy.

The Rules and the discretion of the courts can adequately penalize unreasonable litigious behaviour in costs. [ 48 ] This does not mean that the behaviour of the parties is irrelevant to granting equitable relief—simply that one cannot be denied that relief simply by relying on one’s legal rights. [ 49 ] The clean hands doctrine is very narrowly applied in practice and is confined to conduct relating to the legal dispute itself.

It is obvious that failure to negotiate a settlement would normally not engage the legal issue between the parties and, in fact, this argument could be used to usurp the court’s determination of the real issue. [ 50 ] All the “clean hands” doctrine means is that an applicant cannot rely on his own wrong to obtain equity. But the inequitable behaviour must relate directly to the relief sought. [ 51 ] Notoriously, in Argyll v.

Argyll , [1967] Ch. 302 the Duchess of Argyll was granted an injunction restraining her former husband from disclosing matrimonial confidences, even though her misconduct was crucial to the marriage breakdown and she had disclosed post-separation confidences to the press in the past. Since her allegedly bad behaviour did not relate to the marriage confidences which she sought to restrain from disclosure, the Court was not prepared to deny her equitable relief.

[52] Sharpe (¶ 1.1070) quotes from Argyll as follows and cites Canadian authority endorsing a similar view: “A person coming toEquity for relief . . . must come with clean hands; but the cleanliness required is to be judged in relation to the relief that is sought.” Maxwell’s failure to negotiate—if indeed that occurred—would not offend the “clean hands” principle. The judge erred in his assessment of irreparable harm [53] Most interlocutory injunctions turn on this issue.

In RJR - MacDonald the Supreme Court described irreparable harm in thisway: [59] "Irreparable" refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified inmonetary terms or which cannot be cured, usually because one party cannot collect damages from the other.

Examples of the formerinclude instances where one party will be put out of business by the court's decision; where one party will suffer permanent market lossor irrevocable damage to its business reputation; or where a permanent loss of natural resources will be the result when a challengedactivity is not enjoined. [citations omitted] . . . [Emphasis added] [54] Like examples of irreparable harm include the likely permanent loss of customers; loss of goodwill; and prevention of someonefrom earning a living (respectively Survival Systems Industrial Ltd. v.

Syrett (1998), (NS SC), 165 N.S.R. (2d) 49(SC TD); Mario’s Spaghetti House & Pizzeria Ltd. v. Italian Village Ltd. (1976), (NS CA), 16 N.S.R. (2d) 650 (CA);Fellowes & Son v.

Fisher, [1976] Q.B. 122 (CA)). [55] Lord Diplock describes how the test works in American Cyanamid at p. 408: . . . the governing principle is that the court should first consider whether if the plaintiff were to succeed at the trial in establishing hisright to a permanent injunction he would be adequately compensated by an award of damages for the loss he would have sustained as aresult of the defendant's continuing to do what was sought to be enjoined between the time of the application and the time of the trial.

Ifdamages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position topay them, no interlocutory injunction should normally be granted, however strong the plaintiff's claim appeared to be at that stage. [Emphasis added] [56] Assuming that an applicant can demonstrate irreparable harm, the Court has to consider the effect of granting the injunction onthe respondent. Resorting again to Lord Diplock in American Cyanamid at p. 408: . . .

If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial, thecourt should then consider whether, on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right todo that which was sought to be enjoined, he would be adequately compensated under the plaintiff's under-taking as to damages for theloss he would have sustained by being prevented from doing so between the time of the application and the time of the trial.

If damagesin the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financialposition to pay them, there would be no reason upon this ground to refuse an interlocutory injunction. [Emphasis added] [57] In this case, the judge found: [16] For the purposes of an interlocutory injunction, I will accept that the plaintiff will have difficulty establishing its precise damagesarising from the defendants’ use of its airspace and the surface areas of its property.

While the resulting damage does not seem likely tobe more than very minor, irreparable harm does not require serious damage. Monetary damages should, however, help assuage theplaintiff’s grievance once the offending structures have been removed. [58] Mere difficulty in calculating damages does not constitute irreparable harm. The law confronts that difficulty every day. But itis easier to provide examples, than a definition.

Supplementing those mentioned by the Supreme Court in RJR – MacDonald (¶ 53above), Sharpe lists many others, (¶ 2.411-2.415.1) [59] The apparent contradiction in this case is between the judge’s finding of irreparable harm, quoted above, and his suspension ofthe injunction where he said: [19] The evidence establishes that the defendants have put up temporary construction frameworks that overhang the plaintiff’s propertyand that occupy the airspace above the roof of the plaintiff’s building.

The defendants have indicated that the framework will only berequired for two to three months in order to complete construction of the exterior walls on two sides of the Dillon development. As such,the trespass is apparently temporary. I am satisfied that this represents a minimal intrusion into the plaintiff’s airspace. Anyinterference with the plaintiff’s use and enjoyment of its property is virtually non-existent. [Emphasis added] [60] Perhaps when making his finding of irreparable harm, the judge was thinking of the law’s preference for injunctive relief toprotect property rights, rather than damages.

But that remedial preference usually assumes a permanent wrong, following a trial on themerits. Irreparable harm in an interlocutory injunction context is focused on the harm which may occur prior to trial. The judge’sfinding of minimal impairment of Maxwell’s use and enjoyment of its property indicates no irreparable harm in the interlocutorycontext. That should have been fatal to Maxwell’s request for an injunction. Even if Maxwell had established irreparable harm, thejudge did not go on to consider whether Mosaik had done so, as American Cyanamid requires.

The judge erred in his consideration of the balance of convenience [ 61 ] The balance of convenience involves determining which of the parties will suffer the greater harm from the granting or refusing of an interlocutory injunction, pending trial. Lord Diplock puts it this way: It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, that the question of balance of convenience arises.

It would be unwise to attempt even to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relative weight to be attached to them. These will vary from case to case. Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo . . . . [Emphasis added] [ 62 ] The judge found: [17] As to the balance of convenience, the plaintiff says the defendant will suffer no harm from having the trespass by it and its subcontractors and their personnel enjoined.

However, the plaintiff argues, “no amount of assessment of relative incursion or balance of convenience will ever justify one party’s use (or taking) of another party’s property,” other than in the public law context of expropriation. I accept that the interference with the plaintiff’s rights of ownership, marginal though it is, tilts the balance of convenience in its favour. [ 63 ] Mosaik fairly claims that the judge failed to weigh the balance of convenience. Having found irreparable harm in favour of Maxwell, that ended the analysis. And it usually does, unless the respondent shows irreparable harm as well.

But in this case, the judge’s finding of irreparable harm impaired the balance of convenience analysis. [ 64 ] The judge’s reasoning that supported his suspension of the injunction – that Maxwell’s use and enjoyment of its property was minimally compromised – should have been weighed against the potential inconvenience to Mosaik of granting the injunction. No evidence was led by Mosaik before the judge on the expense and inconvenience of trying to complete its construction with an injunction in place. Nor was this emphasized in its original submissions.

Nevertheless, on the uncontradicted evidence, it is reasonable to infer considerable cost and inconvenience to Mosaik by the granting of an injunction. [ 65 ] Maxwell seeks the injunction. Maxwell bears the burden of proof. It did not establish irreparable harm. On the judge’s finding that it would suffer no material loss of enjoyment in the use of its property, and considering Mosaik’s need to side its building facing Maxwell’s property, the balance of convenience favoured Mosaik. The judge erred in finding otherwise. Conclusion [ 66 ] The fresh evidence motion is dismissed.

Leave to cross-appeal is granted and the cross-appeal is allowed. The interlocutory injunction is set aside. Mosaik will have costs of $2,500.00, inclusive of disbursements, against Maxwell. Bryson, J.A. Concurred in: Fichaud, J.A. Van den Eynden, J.A.