



COURT OF APPEAL FOR ONTARIO

CITATION:
Dunn Aggregates Limited v. Coco Paving Inc., 2021 ONCA 604

DATE: 20210909

DOCKET: C68961

Juriansz, Lauwers and Sossin JJ.A.

BETWEEN

Dunn Aggregates Limited

Plaintiff (Appellant)

and

Coco Paving Inc.

Defendant (Respondent)

James K. Ball, for the appellant

John D. Leslie and Ted Kalnins, for the
    respondent

Heard: August 30, 2021 by video conference

On
    appeal from the order of Justice Scott K. Campbell of the Superior Court of
    Justice, dated December 4, 2020, with reasons at 2020 ONSC 7095.

REASONS
    FOR DECISION

[1]

The appellant Dunn Aggregates previously
    operated as a stone merchant, whose assets were acquired by the respondent,
    Coco Paving. The agreement closed on March 11, 2011. A number of post-closing
    disagreements arose. On September 6, 2011, Coco Paving moved for an interlocutory
    injunction in the context of an anticipated action and the injunction was
    granted. It restrained Dunn Aggregates from breaching the non-competition and
    restrictive covenant agreements entered into pursuant to the asset purchase
    agreement. Coco Paving gave the customary undertaking as to damages.

[2]

The action started by Dunn Aggregates and the
    action started by Coco Paving proceeded to trial together. The trial judge
    concluded that Coco Pavings contractual breaches did not justify Dunn
    Aggregates non-performance of the non-competition agreement. He concluded that
    it would not be appropriate to make the interlocutory injunction permanent, in
    part because the non-competition agreement had expired by its own terms prior
    to trial.

[3]

The assessment of damages remains outstanding.

[4]

The trial judge made an order barring Dunn
    Aggregates from claiming damages under r. 40.03 arising from the interlocutory
    injunction.

[5]

The purpose of the customary undertaking as to
    damages is to protect the party against whom the injunction is granted, in this
    case Dunn Aggregates, if the injunction were found to have been wrongly granted.
    The trial judge cited several authorities for this proposition and pointed to
    the decision in
United States of America v. Yemec
, 2013 ONSC 50, 35 C.P.C. (7th) 57, affd 2014
    ONCA 274, 58 C.P.C. (7th) 223 as being especially persuasive. In
Yemec
, Belobaba
    J. considered the undertaking to pay damages and noted, at para. 14, that its
    purpose is to cover damage caused by a wrongly granted injunction.

[6]

The trial judge
    concluded that because Coco Paving was the successful party at trial the
    injunction had not been wrongfully granted. He pointed out that Dunn Aggregates
    had not made efforts to appeal the granting of the injunction or to alter it
    in the course of over five years of litigation. He found there to be no special
circumstances that would warrant
    the awarding of damages [to Dunn Aggregates] based on the undertaking. There
    was, in his view, no basis on which Dunn Aggregates should be able to advance a
    claim for damages as a result of the injunction having been granted. We agree with
    the trial judge and do not disturb his order.

[7]

The appeal is dismissed
    with costs to Coco Paving fixed in the amount of $3,500, all inclusive.

R.G.
    Juriansz J.A.

P.
    Lauwers J.A.

L.
    Sossin J.A.


