CORRECTION NOTICE

OLT CASE NO(S).:

OLT-22-004573

DECISION ISSUE DATE(S):

September 07, 2023

CORRECTION NOTICE ISSUE DATE:

September 26, 2023

RE: McDonald’s Restaurants of Canada Limited v. York (Region)

Correction to: the Appearances List (on page 1) - to reflect the correct name of the Region.

Originally:

Corrected to:

APPEARANCES:

APPEARANCES:

Parties

Counsel

Parties

Counsel

Region of Vaughan

Dan Michaluk, Michael Grant and Genevieve Fauteux

Regional Municipality of York

Dan Michaluk, Michael Grant and Genevieve Fauteux

“Euken Lui”

EUKEN LUI REGISTRAR

Ontario Land Tribunal

Website: olt.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248

The Conservation Review Board, the Environmental Review Tribunal, the Local Planning Appeal Tribunal and the Mining and Lands Tribunal are amalgamated and continued as the Ontario Land Tribunal (“Tribunal”). Any reference to the preceding tribunals or the former Ontario Municipal Board is deemed to be a reference to the Tribunal.

ISSUE DATE:

September 07, 2023

CASE NO(S).:

OLT-22-004573

PROCEEDING COMMENCED UNDER subsection 26(1) of the Expropriation Act, R.S.O. 1990, c. E.26, as amended

Claimant:

McDonald’s Restaurants of Canada Limited

Respondent:

York Region

Description:

Determination of compensation

Reference Number:

YR2277763

Property Address:

4535 and 4555 Highway 7

Municipality/UT:

Vaughan/York

OLT Case No.:

OLT-22-004573

OLT Lead Case No.:

OLT-22-004573

OLT Case Name:

McDonald’s Restaurants of Canada Limited vs York (Region)

PROCEEDING COMMENCED UNDER subsection 9(1) of the Ontario Land Tribunal Act, 2021, S.O. 2021, c. 4, Sched. 6

Request by:

McDonald’s Restaurants of Canada Limited

Request by:

Request for Directions

Heard:

July 17, 2023 via video conference

APPEARANCES:

Parties

Counsel

McDonald’s Restaurants of Canada

Shane Rayman, Leah Cummings and Brynn Leger

Region of Vaughan

Dan Michaluk, Michael Grant and Genevieve Fauteux

DECISION DELIVERED BY SHARYN VINCENT AND ORDER OF THE TRIBUNAL

INTRODUCTION

1As set out in detail in the June 8th 2023 Order of this Tribunal, the Tribunal reconvened to hear the Motion brought by McDonald’s Restaurants of Canada Limited (McDonald’s) seeking the issuance of a Procedural Order. In contention is the inclusion and terms of a confidentiality clause (CC) and associated declaration in the Procedural Order sought by the Claimant addressing the disclosure of what the claimant contends is “sensitive commercial and financial data”. Despite the intervening exchanges between the Counsel, there is still considerable light between the Parties with respect to what any reader of Tab A to the Claimant’s Motion materials, would agree, is the onerous breadth of the pre-emptory CC and accompanying Declaration and Undertaking sought by the Claimant.

2The Tribunal was in receipt of complete filings in support of the contested Motion, including facta and the transcripts of the cross-examinations conducted.

POSITION OF CLAIMANT

3McDonald’s, in support of the Motion seeking a CC, contends that in order to establish the refuted $2,000,000 in damages attributable to business losses in the claim, McDonald’s will be required to produce and lead evidence which will include “sensitive commercial and financial data, including [but not limited to:] sales history, sales performance at comparable restaurants, data regarding expenses and revenues, projected sales during and after the construction, financial statements, tax filings and actual sales performance of the Restaurant during and after construction.”, …”a practice which [the claimant themselves acknowledges] is virtually universal in business loss claims”.

4The claimant brings the Motion pursuant to, and seeks to rely upon Rules 19.1 and 22.2 of the Tribunal’s Rules of Practice and Procedure (“Rules”) which respectively guide the procedures and desired deliverables of the preliminary Case Management Conference, and secondly, address the Tribunal’s authority to by Order, require that

“any document filed in a proceeding be treated as confidential and not be disclosed to the public where the Tribunal if of the opinion that a): matters of public security may be disclosed; or b) the document contains information regarding intimate financial or personal matters or other matters that are of such a nature that the public interest, or the interest of the person affected outweighs the desirability of adhering to the principle that documents filed in a proceeding be available to the public.”

5The Claimant seeks to at a very preliminary stage of this arbitration have the Tribunal impose a confidentiality clause in a Procedural Order, and thereby take on a ‘gatekeeper’ function. Typically, the Tribunal’s function pursuant to Rule 22 would coincide with providing oversight or dispute resolution once a Procedural Order and associated exchange dates governing the arbitration of the claim had been issued by the Tribunal.

6To substantiate the gravity of this extraordinary “ask”, the Claimants speak to the risk to McDonald’s, by an affidavit supporting the Motion from the National Director, Asset Management and Property Taxation for McDonald’s Restaurants of Canada Limited, who advises the Tribunal as follows:

“ McDonald's, like other businesses in this industry, keeps its financial information, including data related to its sales performance, projections, growth rates, renovation costs, costs of goods sold, and expenses confidential and proprietary. It does not make public this information and goes to considerable length to ensure this information remains confidential. This information is not known within the fast food industry or to the general public.

McDonald's competitors could make use of this information if it were made public. Financial information at times shows McDonald's management, practices and the manner in which it operates its businesses. For example, this information could reveal lucrative restaurant locations and other market advantages that a competitor could rely upon to enhance its business to the detriment of McDonald's.

The fast food industry is characterized by sensitive profit margins, locational advantages and strategic analysis to increase and maintain market share. Companies operating in this industry must compete to survive and maintain a viable share of the market.

If McDonald's sensitive financial information were made public, it would likely be used by its competitors and other parties to McDonald's disadvantage. This would result in a financial loss to McDonald's.”

7In further support of the request, McDonald’s has directed the Tribunal to what they contend are demonstrations of where the Tribunal has endorsed comparable confidentiality orders, which include the same form of declaration and undertaking as those proposed in this Motion. The majority, if not all of the cited authorities involve circumstances and Parties who, although capturing municipal authorities, are distinguished in that the respective confidentiality orders were not contested, and as stated by Counsel for the Region, to which “the Region has not mindlessly agreed.”

THE RESPONDENT’S POSITION

8The Region takes no position with respect to whether a sealing order should be issued in accordance with Rule 22.2 of the Tribunal’s Rules, but asserts that it is meant only to protect documents filed with the Tribunal in a proceeding, and what in fact the claimant is seeking is a protective order to capture the information exchanged as part of the pre-hearing discovery.

9The Respondent reminds the Tribunal, that the Claimant is protected from misuse and disclosure under the deemed undertaking in Rule 30.1.01, which of course forms what the Respondent refers to as the baseline form of protection for all litigants and would in fact capture all evidence and information obtained through pre-trial discovery.

10The Respondent further takes the position that the Claimant has not provided sufficient evidence to justify the requested order which seeks to restrict access to inspection only, as in no possession of confidential information, which could serve to interfere with solicitor-client communications thereby placing the Respondent at a disadvantage by;

“(i) preventing Counsel of record from providing documents to the Region, its client;

(ii) preventing internal legal Counsel for the Respondent from viewing and using documents to advise the Respondents;

(iii) preventing internal legal Counsel from viewing and using documents and otherwise fully communicating with the elected council of the Regional Municipality of York, who has the sole authority to approve settlements of litigious dispute that exceed a certain monetary threshold and who have ultimate oversight of all decisions made by the respondent;

(iv) preventing the respondents from communicating with Metrolinx and York Region Rapid Transport Transit Corporation, with whom the Region has an interest in communicating confidentially with for the purpose of the proceeding;

(v) preventing the respondent from communicating with any other municipal, provincial or federal public institution, even if the Region has a legitimate need to engage in such communication for the purposes of the proceeding.

(vi) preventing the respondent from engaging representatives, witnesses and experts without obtaining a signed undertaking and declaration, and imposes the same restriction on the Tribunal itself.

(vii) preventing anyone who possesses a copy of the document, including counsel of record, from making copies[emphasis added].

(viii) imposing duties on those who sign the undertaking and declaration that are not set out in the undertaking and declaration itself, which creates ambiguity that is inviting of arbitrary and unfair enforcement.

(ix) imposing a requirement to seal information on the respondents and others that is meaningless and inviting of arbitrary and unfair enforcement.

(x) using the ambiguous term representatives, which is vague and inviting, of arbitrary and unfair enforcement, and

(xi) causing the respondent to breach its duties under section 255 of the

Municipal Act.”.

11The Claimant, in part supports its Motion, and most particularly the inspection only stipulation, on the basis that the Respondent is an MFIPPA institution (subject to Municipal Freedom of Information requests by the general public, which could include competitors), thereby alleging that sensitive information could potentially be rendered available. The Respondent refutes this vulnerability, relying upon Anderson Consulting v. Canada (T.D.), [2001, Can LII 22032](https://www.canlii.org/en/ca/fct/doc/2001/2001canlii22032/2001canlii22032.html) 2 FC 324, para [22] which stands for the proposition that “a public institution’s interest in production documents received in

litigation is so limited that the documents are not within institutional “control” such that they are treated as institutional records”, which of course would be subject to MFIPPA requests.

12The Respondent argues, in any event, the Claimant has not ‘adduced any evidence that establishes the existence of a secure, effective and affordable technology for allowing members of [a] physically disparate litigation team to inspect and understand documents that include detailed financial information and detailed analysis, nor is there a proper basis for the Tribunal to conclude that such a technology exists.’

13The Tribunal concurs with the Respondent and finds the request of the Claimant to be too onerous, largely unsubstantiated, and completely out of proportion given the relative routine nature of this claim. In short McDonald’s has not met the burden of demonstrating at this very early, pre trial stage, the compelling need for the pre-emptory confidentially order, and not has persuaded the Tribunal as to how it could possibly successfully perform its suggested role as gatekeeper when the apprehensions of McDonald’s seem firmly grounded on the possibility of human error, and the right to seek further damages on that basis.

14This decision does not foreclose a future request to address sealing orders on specific, sensitive filings with the Tribunal appropriately brought prior to exchange dates to be set out in a Procedural Order.

ORDER

15The Motion brought by McDonald’s is dismissed;

16The Parties are directed to file a Procedural Order in draft final form for the consideration of, and issuance by, the Tribunal, within 21 days of the issuance of this Order.

17The Member is not seized but remains available should the need for direction arise in the finalization of the draft Procedural Order.

“Sharyn Vincent”

SHARYN VINCENT

VICE-CHAIR

Ontario Land Tribunal

Website: www.olt.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248

The Conservation Review Board, the Environmental Review Tribunal, the Local Planning Appeal Tribunal and the Mining and Lands Tribunal are amalgamated and continued as the Ontario Land Tribunal (“Tribunal”). Any reference to the preceding tribunals or the former Ontario Municipal Board is deemed to be a reference to the Tribunal.