Commercial Litigation

Useful Court Orders to Seek in Commercial Litigation

A commercial dispute typically involves issues arising between parties in a business environment. It can include interpersonal or legal disagreements about issues like conflict among shareholders, breach of contract, partnership disputes, and much more.

 

Almost every business faces a commercial dispute at some point. How people address business disagreements can vary, but in many cases, the Court must get involved and make an order. These orders can be requested as the final end of a lawsuit or as a measure during the lawsuit. 

 

Depending on the facts of your commercial dispute and what outcome you want, you can ask the Court to order remedies. Some noteworthy examples of such remedies include: 

 

  • An Injunction;
  • Specific Performance of Contract;
  • An Investigation into the Affairs of a Corporation;
  • Restitution for Unjust Enrichment; and
  • A Mareva Injunction to Freeze Assets. 

 

This article will explain each of these remedies, when to request them from the Court and how a commercial litigation lawyer can help you pursue the right remedy at the right time. 

 

What an Injunction Is and When to Ask for One

 

An injunction is an equitable remedy where the Court orders a party to take or avoid some action. A mandatory injunction requires someone to do something.  A prohibitive injunction prevents them from doing something. A

 

An order for an injunction can be permanent or temporary. The temporary injunctions can be for a fixed period during a lawsuit. Temporary injunctions that last until a lawsuit is heard are interlocutory. 

A Court may grant a permanent injunction where the parties have established their legal rights, and whether the requested injunction is the appropriate remedy. 

 

A Court is likely to grant a temporary injunction if a party can prove:

 

  • There is a serious question to be tried, on the basis of a preliminary assessment the case itself is not frivolous or baseless;


  • The party asking for the injunction would suffer irreparable harm if the request for the injunction were refused; and


  • The party asking for the injunction shows the balance of convenience favors granting the injunction. 

 

Many businesses request a permanent injunction to prevent someone from infringing their intellectual property rights or making disparaging statements about them. 

 

Businesses commonly request temporary injunctions during commercial litigation to prevent continuing harm from another party before trial. 

 

Like many other orders, if a party does not comply with an injunction, they may face imprisonment or fines for civil contempt. 

 

What Specific Performance Is and When to Ask for It

 

Every party to a contract has rights and obligations under its agreement. When a party to a contract fails to perform their obligations, the other party normally could seek an order for damages flowing from the breach of contract.  

 

In some cases, the injured party can instead request an order for a specific performance. Such an order would force the other party to do what they promised to do pursuant to the contract, instead of paying damages. 

 

A Court is likely to grant the remedy of specific performance if a party can prove:

 

  • The subject matter of the dispute is unique and cannot be readily duplicated elsewhere; and


  • Monetary damages are not a just and adequate remedy to fix the harm done. 

 

As an example, specific performance might be appropriate for breach of a contract to buy a unique collector item that cannot be bought anywhere else.

 

Even if damages were ordered in that scenario, they could not be used to purchase another piece of property with the same qualities. In that sense, the damages would not put the purchaser in the position they would be in had the seller met their obligations pursuant to the contract. 

 

A party can ask for specific performance in alternative to damages for breach of contract, but the Court is reluctant to force any party to do anything if damages can more easily put the parties in the positions they would be in were the contract fulfilled.  

 

When to Ask for an Order to Investigate a Corporation

 

A shareholder in a company subject to the Ontario Business Corporations Act can seek an order to investigate the affairs of the corporation they hold shares. 

 

The Court can hear a request for investigation with or without notice to the party that will be subject to the investigation, depending on the circumstances. 

 

The Court is likely to grant an order for investigation if it appears that:

 

  • The corporation carries on its business with the intention of defrauding any person;


  • The corporation or its directors indulged in shareholder oppression;


  • The corporation was incorporated or dissolved for a fraudulent or unlawful purpose; or


  • The persons concerned with the corporation’s formation, business, or affairs acted fraudulently or dishonestly.

 

If you’re a registered shareholder who suspects fraud or other misconduct occurring within the corporation you own equity in, this is the remedy for you. You don’t need to prove there necessarily is wrongdoing – only that there is a basis to at least investigate.  

 

What Unjust Enrichment Is and When to Ask for Restitution

 

The Court can order restitution for unjust enrichment claims.  An order for restitution is intended to compensate a monetary value to a claimant for any benefits they conferred to another party who did not suffer a corresponding loss, without a juristic reason.  

     

To prove unjust enrichment a claimant must show the Court that:

 

  • The other party received a benefit;


  • The claimant suffered a corresponding loss; and


  • The other party’s enrichment and the claimant’s corresponding loss occurred without any juristic reason.

 

Unjust enrichment and requests for restitution are appropriate in the commercial context where one party provides goods or services, and the other side refuses to pay. 

 

One example is if a contractor business makes improvements to a customer’s home, and the customer ends the contract prematurely. Even though the contractor did not technically complete the work triggering full payment, they could claim unjust enrichment and restitution for work they already put in for that customer.

 

What a Mareva Injunction Is and When to Ask for One

 

A Mareva injunction is an extraordinary order for freezing someone’s assets and finances for a given time. Its primary purpose is to prevent a defendant or non-party from disposing of or moving assets for a specific period.

 

A Mareva injunction typically requires the test for a regular injunction is met first. The Court would then only grant a Mareva injunction if the claimant also: 

     

  • Makes full and frank disclosure of all relevant matters within their knowledge;


  • Gives sufficient details regarding their claim against the other party; 


  • Mentions the grounds for believing the other party has assets in the Court’s jurisdiction to freeze; 


  • States the grounds for believing there is a risk of the assets being moved or disposed of before satisfying the judgment or award; and


  • Gives a legal promise called an undertaking to pay damages for any harm caused by the Mareva injunction to the other party if the claimant is not successful in the overall lawsuit. 

 

Mareva injunctions are usually pursued and granted without notice to the party the order is sought against. It may be appropriate to ask the Court for a Mareva injunction if there are serious allegations of fraud, embezzlement, and movement of assets for other nefarious reasons against the other party.

How A Commercial Litigation Lawyer Can Help

 

A commercial litigation lawyer can help you determine what orders are necessary to protect your business interests at any stage of your commercial dispute. They can also help you make your case to the Court properly to avoid delays and potential dismissal of an otherwise strong claim. 

 

Consulting a business lawyer early or even before the litigation process can be a cost-efficient way to maximize your chances of success in your commercial dispute. If there is a lot at stake for your business in a commercial lawsuit, the cost of a commercial litigation lawyer’s expertise and advocacy could be the difference between receiving nothing and hundreds of thousands in damages.  

 

Conclusion

 

Depending on the facts of your case and the result you want, you can seek different orders from the Court. Every order has its own legal test you must satisfy before the Court can grant you relief.

 

An experienced commercial litigation lawyer can advise you on what orders to seek and when. To make that assessment, they will review your facts, the applicable law and the required procedure. Every case turns on its own circumstances and commercial litigation is seldom straightforward.  

 

Waiting too long to pursue the orders your business needs to succeed in its commercial dispute can cause issues for your lawsuit down the line. The sooner you get in touch with a commercial litigation lawyer, the quicker they can start helping your business achieve its desired result.   

 

Contact Us

 

If you are party to a commercial dispute and want to discuss your legal rights and options going into commercial litigation, our Commercial Litigation Lawyers at Achkar Law can help.  Contact us by phone toll-free at+1-888-914-7432 or email us at [email protected], and we will be happy to assist.

 

.