6.25: Preserving or protecting property or its value

Case Summary

The Plaintiff applied for a Preservation Order pursuant to Rule 6.25 in relation to an underlying intellectual property dispute. The Plaintiff sought an Order requiring the corporate Defendant to pay all or a portion of its profits into trust until after Trial.

Justice Nixon stated that Preservation Orders, as a form of prejudgment relief, should only be granted in rare instances as guided by the principle of judicial abhorrence for prejudgment execution. The Court must exercise restraint in both deciding to grant a Preservation Order and in determining its appropriate scope.

In exercising its discretion, the Court may grant a Preservation Order when it is satisfied that the Applicant has met the customary three-part test for an Injunction. This test is whether: (i) there is a serious issue to be tried; (ii) the Applicant will suffer irreparable harm in the absence of relief; and (ii) the balance of convenience favours granting relief.

Justice Nixon held that, despite the Plaintiff’s evidence being speculative, the issue of the Plaintiff’s alleged ownership interest over the intellectual property constituted a serious issue to be tried. However, Justice Nixon found that the Plaintiff had not demonstrated with clear and non-speculative evidence that it would suffer irreparable harm in the absence of relief and further noted that the balance of convenience favoured denying the Preservation Order, due in part to the fact that the Plaintiff was much larger and more established than the corporate Defendant—the marginal benefit that the Plaintiff might receive would be dwarfed by the potential prejudice to the corporate Defendant.

Justice Nixon, therefore, dismissed the Application.

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