COURT FILE AND PARTIES

COURT FILE NO.: CV-13-484531

DATE: 20131104

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: PUSATERI’S YORKVILLE LIMITED, Plaintiff

AND:

CITY OF TORONTO, Defendant

BEFORE: D.L. Corbett J.

COUNSEL:
Alan J. Lenczner, Q.C. and Brent Kettles, for the Plaintiff

Darrell A. Smith and Amy Murakami, for the Defendant

HEARD: October 28, 2013

ENDORSEMENT

[1] Pusateri’s seeks an interlocutory injunction until trial to preserve a lay-by on Bay Street, in Toronto, that is used for valet parking for its grocery store customers. The City of Toronto plans to remove the lay-by as part of improvements to Bay Street.

[2] To obtain the interlocutory injunction, Pusateri’s must establish, on a balance of probabilities, that:

(a) there is a serious issue to be tried;

(b) it will suffer irreparable harm if the injunction is not granted; and

(c) the balance of convenience weighs in favour of granting the injunction.[^1]

Disposition

[3] There is no serious issue to be tried that would lead the trial court to prevent removal of the lay-by. Pusateri’s remedy is exclusively in damages. And so, for the reasons that follow, the injunction motion is dismissed with costs.

Reasons

(a) No Serious Issue To Be Tried

[4] The threshold on the merits for an interlocutory injunction is low. An injunction may issue even if the plaintiff is unlikely to succeed at trial, so long as the claim is “neither frivolous nor vexatious”.^2

[5] The precise weight accorded the merits remains controversial, both under the first branch of the test, and in considering the balance of convenience.[^3] However, these controversies are not material to this motion. Using the lowest of thresholds, Pusateri’s cannot show a serious issue to be tried that it is entitled to prevent removal of the lay-by.

The Injunction Jurisdiction

[6] Interlocutory injunctions are equitable remedies which “may be granted… where it appears… to be just or convenient to do so”.[^4] An interlocutory injunction ordinarily remains in place until the end of the case.[^5] Its purpose is not to grant judgment pending trial but to maintain a reasonable state of affairs so that the trial court may do justice at the end of the case. Justice Sharpe puts the principle as follows in his textbook:

The problem posed by interlocutory injunction applications may best be understood in terms of balancing the relative risks of granting or withholding the remedy before full adjudication of the legal rights at issue. These risks may be stated as follows. The plaintiff must show a risk that his or her rights will be destroyed by the defendant’s actions before the court has rendered its judgment at trial. The risk to the plaintiff is that if an immediate remedy is not granted, his or her rights will be so impaired by the time of trial and judgment that it will be simply too late to afford an adequate remedy.

… Inherent in the exercise of granting a remedy before the rights of the parties have been determined lies the risk of harming the defendant by enjoining a course of conduct that ultimately may be found to be lawful.[^6]

[7] In many cases, the plaintiff must show that it could be entitled to a permanent injunction after trial in order to obtain an interlocutory injunction pending the trial. For example, if the plaintiff is seeking a final order that a large tree not be cut down, she may seek an interlocutory injunction until trial to preserve the tree. If the tree is cut down before trial, it could not be restored afterwards.

[8] Sometimes the form of the final order is not a permanent injunction, but has similar effect. For example, an applicant challenging a by-law or administrative decision disqualifying it from its current use of land may be entitled to an interlocutory injunction where, if the applicant cannot continue its land use pending trial, it may be driven out of business before the case is decided. An interlocutory injunction may permit the applicant to continue its impugned use until trial, and at trial a remedy will be sought that, though not taking the form of a permanent injunction, will permit the plaintiff to continue in its use of the land into the future.[^7]

[9] So it is not the case that an interlocutory injunction is only available if the trial court may order a permanent injunction at trial. But an interlocutory injunction will only be available if it is necessary to permit the plaintiff to benefit from the final decision at trial.

… interlocutory orders are made only with a view to assuring that the rights of the plaintiff asserted in the action may be effectually enforced by the Court in the event that the action ultimately succeeds. Thus for example, construction of a building in alleged breach of a building by-law will be restrained pending the trial of the action in order that the Court not be faced at the trial with a fait accompli.[^8]

[10] Or in other words, an injunction will not be granted where:

… no prospective act of the Defendant… can in any way endanger the ultimate accomplishment by the Plaintiff of all of the relief claimed by it in the event that the Plaintiff succeeds at trial.[^9]

[11] Pustaeri’s argues that this proposition is not so clear as a result of the British Columbia Court of Appeal’s decision in TELUS v. Rogers.[^10] At issue in that case was Rogers’ allegedly deceptive advertising. It claimed that it had “Canada’s most reliable network”. TELUS, one of Rogers’ competitors, alleged that this claim was not true. TELUS commenced proceedings against Rogers under the Competition Act and sought an injunction to restrain Rogers from its deceptive advertising pending trial. However, under the Competition Act, only the Attorney General may obtain an injunction. Private parties like TELUS are limited to damages and punitive damages.

[12] The motions judge concluded that Rogers’ advertising was no longer correct. But could an injunction lie to restrain its use pending trial? It was close to the Christmas season and both firms alleged that they would suffer substantial harm – TELUS if it was faced with erroneous advertising while trying to sell its services, and Rogers if it was deprived of its advertising without sufficient time to develop alternative materials. The motions judge found that many of the injunction factors were balanced and decided the motion in favour of TELUS based on his assessment of the relative strength of the parties’ cases.

[13] The British Columbia Court of Appeal approached the case initially as a matter of jurisdiction, an issue it raised itself at the hearing of the appeal. It concluded that the trial court, as a court of inherent jurisdiction, had the jurisdiction to grant an injunction “notwithstanding that the statute itself does not provide for the issuance of injunctions at the behest of a private party”.[^11] The Court of Appeal then went on to hold as follows:

In saying that the Supreme Court had jurisdiction to grant an interlocutory injunction, we do not wish to be taken as endorsing the proposition that the plaintiffs might, at the conclusion of the case, be entitled to a permanent injunction. There is some authority that acknowledges jurisdiction to grant an interlocutory injunction in a claim under s.36 of the Competition Act but denies there is jurisdiction to issue a permanent injunction….[^12] We express no view on whether a permanent injunction can be granted to a private party in a claim brought pursuant to s.36 of the Competition Act.

While we are of the view that the Supreme Court has jurisdiction to grant an interlocutory injunction in a claim brought under s.36 of the Competition Act, the scheme of the Act, and its concentration on damages as the appropriate final remedy are important considerations for the court in considering whether interlocutory relief ought to be granted. In particular, the court should be careful in considering whether the plaintiff can make out a case for “irreparable harm” in the analysis of the test for an interlocutory injunction.

In the case before us, the defendant did not contend that the concentration on damages as a remedy in the statute ought to have led the chambers judge to find that any harm that might be suffered by the plaintiff should not be characterized as “irreparable”. We do not, therefore, propose to say anything further about this issue.

Given that we find that the Supreme Court did have jurisdiction to issue an injunction, we agree that the chambers judge applied the correct test to injunctive relief by first considering whether TELUS had demonstrated that it had an arguable case, next considering whether it would suffer irreparable harm if no injunction were granted, and finally considering where the balance of convenience lay as between the parties.[^13] [emphasis in original]

[14] With the greatest of respect, I have difficulty with this analysis:

(a) The court cites two Ontario trial decisions as authority that an interlocutory injunction may be available even where an injunction is not available after trial. One of the cited decisions stands for the opposite principle.[^14] The other cited decision has no support in other cases or in academic commentary and seems either wrong on this point or based on the quasi-criminal nature of breaches of the Competition Act and the likelihood that the Attorney General would seek an injunction if illegal conduct persisted after a civil decision to this effect.[^15]

(b) “Harm” and “remedy” are distinct and should be treated separately, so as not to confuse the analysis. There are many cases where a plaintiff may be restricted to a remedy in damages but where the harm is nonetheless “irreparable”. The plaintiff whose tree is cut down before trial will only receive damages; that does not preclude her from an injunction to preserve the tree pending trial. In wrongful death cases, damages are awarded to compensate for the most irreparable of harms. Loss of a business or loss of market share are frequently cited as the sorts of “harms” that may be “irreparable”. And yet they can be and are compensated by awards of damages in many cases. And there are cases where, clearly, damages would be an adequate remedy, but the defendant would be unable to pay them, thus justifying injunctive relief.[^16]

(c) The unavailability of relief other than damages at the end of trial bears directly on whether there is a situation that the court needs to preserve so that justice may be done at the end of the case. “Justice”, in this context, is not a reference to the Chancellor’s foot, or the motion judge’s inherent sense of what may be fair. It refers to the recourse available to the plaintiff on the proper application of the law.

[15] I am not bound by the analysis in TELUS v. Rogers and I decline to follow it. To quote again from Justice Sharpe’s textbook, “the basic premise of granting an interlocutory injunction [is that] the plaintiff must demonstrate that, unless an injunction is granted, his or her rights will be nullified or impaired by the time of trial”.[^17] It is this premise that illuminates the test in RJR-Macdonald and lies at the heart of the proper exercise of discretion to grant or deny an interlocutory injunction.

Application to this Case

[16] Pusateri’s alleges injurious affection and/or infringement of an easement. The claim in injurious affection sounds in damages only. It cannot be a basis for enjoining the City from removing the lay-by. The claim to an easement is entirely without merit.

Injurious Affection and Nuisance

[17] Section 2(1) of the Expropriations Act provides that, where a statutory authority, such as the City of Toronto, causes losses to an owner of land, the “statutory owner shall compensate the owner of land for loss or damage caused by injurious affection”.[^19]

[18] A claim for injurious affection by a statutory authority like the City of Toronto can only be a claim in damages, and it can only be brought before the Ontario Municipal Board.[^20] The court may grant an interlocutory injunction where final relief is to be granted in another forum, such as the Municipal Board.[^21] But it should only do so if the injunction is necessary to preserve the ability of the Municipal Board to do justice at the end of the case.

[19] Pusateri’s may be assisted in its claim for injurious affection by the Supreme Court of Canada decision in Antrim Truck Centre Ltd. v. Ontario (Ministry of Transportation).[^22] In that case, Ontario relocated an access ramp to Highway 401. This relocation destroyed the plaintiff’s business as a gas station and rest stop. The plaintiff’s land was not expropriated, but because its business was no longer near an access ramp, its customer base disappeared. But the case has nothing to do with injunctions. It was a claim for damages.[^23]

[20] I conclude that there is a “serious issue to be tried” that Pustaeri’s may be injuriously affected if the City removes the lay-by. But its remedy is damages, and only damages. There is no serious issue that Pustartei’s is entitled to prevent removal of the lay-by on this basis.

Easement

[21] The lay-by was authorized in a by-law enacted by City Council which, on its face, does not create an easement. An easement by prescription or adverse possession cannot be created over a public highway. Bay Street is a “public highway”. And the “public highway” includes the sidewalks and the travelled portion of the roadway.

[22] Pusateri’s has never been entitled to exclusive use of the lay-by. Any member of the public may pull into the lay-by to pick up or drop off passengers. After the lay-by is removed, Pusateri’s and its customers will not be barred from using the portion of Bay Street now occupied by the lay-by. It will still be there, in a different form, and will provide public access to the store: it will be a sidewalk.

[23] Pusateri’s points to language in the by-law creating the lay-by that, it says, establishes an easement. There is no merit to this argument.

[24] The request for the lay-by was sent to the Community Council without any qualifying language. There was no term. The Community Council added conditions to the bylaw. One included a requirement for Pusateri’s to pay the cost of restoring the lay-by if it was no longer “viable” or “needed”. This clause was not for Pusateri’s benefit – it benefited the City by specifying that Pusateri’s would bear the cost of both construction and removal of the lay-by.

[25] It may be an issue whether Pusateri’s is required to bear the cost of restoring the lay-by in the current circumstances. Pusateri’s is aggrieved that the lay-by will be removed. As I have indicated, it may pursue a claim for injurious affection before the Ontario Municipal Board: I express no view on the merits of such an application. Similarly, the City may seek to recover from Pusateri’s the cost of restoring the lay-by for use as sidewalk, roadway and related uses. I say nothing about the merits of that potential claim.

(b) No Irreparable Harm

[26] Pusateri’s led evidence that 30% of its gross business comes from customers who use the lay-by when visiting the store. Pusateri’s then assumes that all of this business will be lost if the lay-by is removed. If this happens then a profitable store will lose money. The business will fail. 120 employees will be thrown out of work.

[27] I do not accept this argument. Indeed, I found it vaguely ridiculous. If the lay-by is removed then Pusatrei’s, presumably a well-managed business, will seek alternative arrangements for its customers. Some customers may be lost. For the purposes of this motion, I am prepared to accept that some non-trivial number of customers may be lost.

[28] But there is another problem here. The lay-by is not like a tree. It did not take a century to grow. It is not like some great edifice, the cost of which is enormous. If a court so orders, the lay-by could be reconstructed, not in decades or years, but in days or weeks. The cost to construct it, ten years ago, was around $55,000. At the end of trial, the lay-by could be restored, if this remedy was available in law. This, in and of itself, shows that there will not be irreparable harm if the City is permitted to proceed with its plans immediately.

(c) Balance of Convenience

[29] The City has the statutory authority to manage public highways within Toronto. It did so in 2003 when it authorized the lay-by. It did so again in 2013 when it decided to remove the lay-by, restore the sidewalks, and add trees, while it was resurfacing Bay Street. These decisions are matters of public policy and are within the City’s jurisdiction. It would be a serious derogation from City Council’s authority to delay implementation of its public policy by way of an injunction. This does not preclude the court from issuing an injunction in an appropriate case, as some of the land use and zoning cases indicate. However, the private interest of Pusateri’s in its current form of valet parking pales in comparison to the City’s interest in prompt and efficient road improvements and maintenance. The balance of convenience weighs against granting the injunction in this case.

Summary

[30] The record in this case was developed well, and the motion argued fully and with great ability. I am grateful to counsel for that assistance.

[31] Pusateri’s sincerely and strongly believes that the lay-by should remain. But this is a policy debate, not a legal one. This court does not weigh in on whether policy choices by elected governments are good or otherwise. As a matter of law, I am comfortable that Pusateri’s position was put to me at its very highest and most persuasively, and yet this was not a close call.

[32] I understand that the City plans to remove the lay-by immediately, while it has construction personnel and equipment at the ready. I was told that the work had to begin by November 15th, at the very latest, and will take about two days to complete.

[33] I extend the interim order until 5:00 p.m., November 6, 2013, to enable Pusateri’s to seek a further extension pending any motion it may bring for leave to appeal in the Divisional Court.

Costs

[34] The City has prevailed and is entitled to its costs. If these cannot be agreed, the City shall make brief written submissions by November 20, 2013. Pusateri’s may respond by November 29, 2013. There shall be no reply or oral costs submissions unless I direct otherwise.

D.L. Corbett J.

Date: November 4, 2013

[^1]: R.J.R. MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311 at para. 53.

[^3]: R.J. Sharpe, Injunctions and Specific Performance (Looseleaf, 2012).

[^4]: Courts of Justice Act, R.S.O. 1990, c. C.43, s.101.

[^5]: R.J. Sharpe, Injunctions and Specific Performance (Looseleaf, 2012), para. 2.15.

[^6]: Ibid., paras. 2.60, 2.70.

[^7]: See Orica Canada Inc. v. Township of East Luther Grand Valley (2009), 62 M.P.L.R. (4th) 267 (Ont. S.C.J.).

[^8]: Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., 1995 10638 (ON SC).

[^9]: City of London v. Talbot Square, 1978 1595 (ON SC).

[^10]: TELUS Communications Co. v. Rogers Communications Inc., 2009 BCCA 581.

[^11]: Ibid., at para. 44.

[^12]: 947101 Ontario Ltd. v. Barrhaven Town Centre Inc. (1995), 1996 8235 (ON SC).

[^13]: TELUS v. Rogers, supra, at paras. 45‑48.

[^14]: 947101 Ontario Ltd. v. Barrhaven Town Centre Inc. (1995), 1995 7391 (ON SC).

[^15]: Mead Johnson Canada v. Ross Pediatrics (1996), 1996 8235 (ON SC).

[^16]: See R.J. Sharpe, Injunctions and Specific Performance (Looseleaf, 2012), para. 2.415.

[^17]: Ibid., paras. 2.550, 2.600‑2.630.

[^19]: Expropriations Act, R.S.O. 1990, c. E.26, s.21.

[^20]: Curactive Organic Skin Care v. City of Toronto et al., 2011 ONSC 2041; aff’d 2012 ONCA 81.

[^21]: Brotherhood of Maintenance of Way Employees v. Canadian Pacific Ltd., 1996 215 (SCC).

[^22]: Antrim Truck Centre Ltd. v. Ontario (Ministry of Transportation), 2013 SCC 13.

[^23]: See also Newfoundland (Minister of Works, Services and Transportation) v. Airport Realty Ltd., 2001 NFCA 45; Jesperson’s Brake & Muffler Ltd. v. Chilliwack (District of) (1994), 1994 1662 (BC CA).