C. Injunctions

Author:John D. McCamus
Profession:Professor of Law. Osgoode Hall Law School, York University

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Where a party has given a contractual undertaking not to do something, an order of specific relief would take the form of an injunction. Injunctions are of essentially two kinds, "prohibitory" and "mandatory."160A

prohibitory injunction is a court order requiring the defendant to refrain from doing that which the defendant promised not to do. A mandatory injunction requires the defendant to undertake a positive act of some kind, normally a positive act that will have the effect of undoing something the defendant has done in breach of a contractual obligation. By way of illustration, in Gross v. Wright,161the Supreme Court of Canada confirmed a mandatory injunction ordering the defendant to demolish a party wall that had been constructed in breach of an agreement with his neighbour. The contract stipulated that the wall was to be two feet or more in thickness, half on each side of the property line. The wall complied with the contractual requirements on the plaintiff’s side but had been narrowed by the defendant on his own side of the line. By requiring demolition of the wall, the mandatory injunction had the effect of restoring the status quo that existed prior to the breach. A prohibitory injunction, on the other hand, simply requires the defendant to refrain from acting inconsistently with a negative undertaking.

As we have seen earlier in this chapter,162a plaintiff seeking an order of specific performance must demonstrate that damages at common law do not constitute an adequate remedy and, as well, must avoid offending the limiting principle that an order of specific performance will not be granted that requires the court to engage in extensive supervision of complex or long-term obligations. It is generally assumed that these limitations will not be as strictly applied to the specific enforcement of negative obligations. The classic statement is found in Doherty v.Allman,163where Lord Cairns L.C. explained as follows:

If parties, for valuable consideration, with their eyes open, contract that a particular thing shall not be done, all that a Court of Equity has to do is to say, by way of injunction, that which the parties have already said by way of covenant, that the thing shall not be done; and in such a case the injunction does nothing more than give the sanction of the process of the Court to that which already is the con-

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tract between the parties. It is not then a question of the balance of convenience or inconvenience, or of the amount of damage or of injury - it is the specific performance, by the Court of that negative bargain which the parties have made, with their eyes open, between themselves.164Although Lord Cairns suggested that the court has essentially "no discretion to exercise"165in such circumstances, it is accepted that the courts retain a discretion to decline a request for an injunction and that the presumption in favour of injunctive relief is not an absolute one.166

This greater willingness to order defendants to refrain from breaching express or, indeed, implied167negative covenants rather than to specifically perform positive obligations appears to rest on an assumption that the enforcement of negative obligations is a more straightforward matter than ordering the specific performance of a positive obligation. Ordering the defendant to refrain from conduct is, indeed, less likely to involve the court in difficulties of supervision than an order to carry out a positive act. It is also less invasive of the defendant’s freedom of action. When one turns to consider mandatory injunctions, however, the courts evidence a much greater willingness to assess the appropriateness of the decree. Thus, for example, mandatory injunctions will not be issued in circumstances where the burden imposed thereby on the defendant is severely disproportionate to the benefit to be enjoyed by the plaintiff.168

The distinction between positive and negative undertakings is not easily drawn. Many positive covenants could be interpreted as containing implicit negative covenants and vice versa. A positive promise to provide exclusive services to an employer is implicitly a negative covenant not to provide such services to a third party. A promise not to terminate a particular employment relationship is implicitly a positive covenant to continue the employment. A positive covenant to purchase all requirements of a particular item from a particular supplier is implicitly a negative covenant not to purchase such items from third parties. Such illustrations can be easily multiplied. Moreover, the distinction is man-

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ipulable. A drafter who wished to take advantage of the rule in Doherty v.Allman could craft what might appear to be in substance a positive obligation in terms of a negative covenant not to do all else. Accordingly, in determining whether a covenant is positive or negative, courts are obliged to determine whether the covenant in question is positive or negative as a matter of substance rather than form.169

Further, courts will not enforce a negative covenant by injunction where the effect of doing so is to specifically enforce a positive contractual obligation.170Application of this principle in the context of employment contracts is a matter of some subtlety. As we have seen,171courts are generally unwilling to specifically enforce either the employer’s or the employee’s obligations under such agreements. At the same time, however, courts are willing to enforce to some extent negative covenants obliging the employee to refrain from providing services to a third party. In theory, at least, courts will withhold injunctive relief of such provisions if the effect of the injunction would be to effectively coerce the defendant employee to provide services to the plaintiff employer. The classic authority on point is Lumley v. Wagner.172Benjamin Lumley was the manager of Her Majesty’s Theatre Haymarket. He had retained the services of a famous opera singer, Johanna Wagner, to perform at his theatre for a period of three months. Wagner also agreed not to perform for anyone else during this period. In due course, however, she signed an agreement to provide similar services during the same period with Frederick Gye. Gye was the proprietor of the opera theatre at Covent Garden and was Lumley’s chief competitor.173Lumley sought to enjoin Wagner from working for Gye. The court noted that under existing principles it would not order specific performance of Wagner’s undertaking to perform for Lumley. The court did, however, order Wagner to refrain from working for Gye, even though, as the court conceded, the granting of the injunction might well encourage Wagner

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to perform her agreement with Lumley. In the particular circumstances of this case, it may be noted, the short-term nature of the engagement and Wagner’s star status no doubt had the consequence that Wagner, as a practical matter, was not necessarily compelled by the injunction to work for Lumley. Indeed, in the event, Wagner sang for neither Lumley nor Gye.

In the later case of Warner Bros. Picture Inc. v. Nelson,174the defendant Nelson, the famous film actress known as Bette Davis, had entered into a potentially much longer commitment to provide services exclusively to Warner Brothers. Under an agreement that could be renewed annually by Warner Brothers for several years at increasing rates of salary, Davis also agreed that she would not provide her services to any other photographic, stage or motion picture producer "or engage in any other occupation"175without the express written consent of Warner Brothers. In due course, however, "for no discoverable reason except that she wanted more money"176Davis left the United States and entered into an agreement to provide her services to a third party in England. Warner Brothers, relying on Lumley v. Wagner, sought to enjoin Davis from pursuing this opportunity on the basis of the negative covenant in her employment contract. Branson J., after reviewing relevant authorities concluded as follows: "where a contract of personal service contains negative covenants, the enforcement of which will not amount to a decree of specific performance of the positive covenants of the contract or to the giving of a decree under which the defendant must either remain idle or perform those positive covenants, the Court will enforce those negative covenants."177As Branson J. noted, a simple injunction ordering the defendant not to "engage in any other occupation" could not be awarded as it...

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