SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-14-498565

DATE: 20140310

RE: David Mandel, Plaintiff

AND:

Morguard Corporation, Defendant

BEFORE: Mew J

COUNSEL:
David Mandel, in person

Martin Henderson and Vedran Simkic, for the defendant

HEARD: 7 March 2014

ENDORSEMENT

[1] The plaintiff was a residential tenant of a unit in an apartment building on Tweedsmuir Avenue in Toronto.

[2] In 2009 the apartment building was demolished as part of a plan of redevelopment. The defendant owner of the Tweedsmuir Avenue property developed a procedure for the existing tenants to be relocated and, if they desired, to eventually return to the newly built development. The redevelopment plan was the subject of three decisions of the Ontario Municipal Board (“OMB”), the most recent of which was issued on 13 April 2010.

[3] The last OMB decision was rendered despite the form of tenant leases or an Agreement pursuant to section 37 of the Planning Act not having been finalised. A section 37 Agreement was subsequently entered into between the defendant and the City of Toronto on 15 April 2010.

[4] While two new buildings have been under construction at the Tweedsmuir Avenue site, the plaintiff and other tenants were relocated to another building owned and/or managed by the defendant. The redevelopment is nearing completion and, in purported compliance with the procedure established by the defendant, tenants wishing to return to Tweedsmuir Avenue have been asked to choose their new units.

[5] The plaintiff alleges that the defendant has not complied with the agreements it has made and that the process it has initiated for the selection of units and the relocation of tenants to those units is in breach of the defendant’s obligations.

[6] On 14 February 2014 the plaintiff filed a notice of action in which he seeks an order preventing the defendant “from allocating any unit until the matter is settled at law”. The “matter” in question is whether the defendant’s allocation of units in the building commonly known as the “Heathview” is contrary to an agreement between the plaintiff and the defendant and to the orders of the OMB.

[7] Prior to the hearing before me, there were three attendances at motion scheduling court to deal with the plaintiff’s request for an urgent motion hearing date.

[8] On 24 February 2014 the defendant served on the plaintiff a Form N5 Notice to Tenant to Terminate Early in respect of his occupancy of the plaintiff’s occupancy of temporary accommodations pending completion of the rental replacement units. The defendant states as its reason for giving such notice:

Refusing to proceed with the Ready for Occupancy Notice in a timely manner in accordance with the terms of the Agreement constitutes a substantial interference with the reasonable enjoyment of the complex by the Landlord and other tenants.

[9] During the course of argument, counsel for the defendant undertook on behalf of the defendant to withdraw the Form N5 Notice.

[10] The interlocutory relief sought by the plaintiff in his motion is as follows:

An Order rescinding the existing “Response to the Ready for Occupancy” Notices and preventing the defendant from allocating any unit at the municipal address known as 320 Tweedsmuir Avenue, Toronto, Ontario until the building is complete and ready for full occupancy.

The Plaintiff’s Position

[11] The plaintiff made comprehensive oral submissions and provided a written outline of his position. His submissions addressed the three stage test to obtain an interlocutory injunction laid out in RJR MacDonald v Canada (AG) 1994 117 (SCC), [1994] 1 S.C.R. 311. At the risk of over simplifying those submissions, the points raised by the plaintiff include the following:

a. The section 37 Agreement does not accord with representations that were made at the OMB hearing;

b. The procedure for returning tenants to select their units in general, and the `Ready for Occupancy Notice given by the defendant to the plaintiff on 30 October 2013 in particular, does not comply with the terms of the section 37 Agreement and/or other representations or agreements made by the defendant;

c. The plaintiff (and others) are being compelled to relocate without being given an opportunity to view the units available for them to relocate to;

d. If the plaintiff wishes to move he is effectively being given no opportunity to renegotiate the terms of the proposed lease that he would be required to enter into (the terms of which he says are objectionable and not in compliance with the letter or the spirit of the OMB decisions and the defendants previous representations and agreements);

e. The proposed relocation anticipates the plaintiff being required to move to his new unit while the building is still under construction, with attendant noise, disruption, inconvenience and hazards;

f. Injunctive relief is appropriate because without it the plaintiff will be forced to sign a lease that is significantly different from that which he says the OMB approved and, thereby, give up important legal remedies and benefits that he should have. He would also be subjected to the possibility of having to move more than once and/or before the building is completed. And he would lose rights to choose a unit which he says are more extensive than those granted by the defendant under the existing procedure;

g. The balance of convenience favours the individuals whose daily living arrangements are at stake rather than the defendant which risks only a relatively modest financial cost if the injunction is granted;

h. There would be no irreparable harm to the defendant.

[12] The plaintiff made other arguments arising from the possibility that he would be evicted from his current residence as a result of the notice to terminate served by the defendant. Given the subsequent undertaking to withdraw that notice, those concerns fall away.

[13] The plaintiff has given no undertaking as to damages. He says that he is a man of modest means.

The Defendant’s Position

[14] The defendant’s evidence is that:

Morguard will suffer significant financial losses there is a delay in the occupancy of the Replacement Rental Units. For each month of delay, Morguard will lose approximately $33,675 of rental income from those units. Morguard will also incur an additional cost of approximately $18,290 per month for continued subsidization of returning tenants in their temporary replacement apartments at the Colonnade. Moreover, delay in occupancy of the Replacement Rental Units will cause the loss of approximately $100,000 per month in rental income for all other units on the Lands to be allocated to new tenants, as the Agreement requires Morguard to allocate units for occupancy by the Original Tenants before any new ones.

[15] Beyond that, the defendant asserts that the plaintiff is effectively attempting to re-litigate a unit selection process which has already been determined by the OMB (following a hearing in which the plaintiff was a prominent participant).

[16] Furthermore, the defendant notes that occupancy permits will be required from the City before any tenants, including the plaintiff, occupy any part of the new building. The plaintiff’s claim is therefore said to be without merit.

[17] Evidence of irreparable harm must be clear and not speculative. The defendant argues that the plaintiff’s bare allegations that he will suffer inconvenience due to ongoing construction, lose the ability to choose the replacement rental unit that best suits him and suffer a disproportionate loss of enjoyment of his replacement rental unit do not amount to irreparable harm.

[18] The balance of convenience should also favour the defendant since an injunction would prohibit it not only from allocating a unit to the plaintiff but, also, allocating units to 31 other tenants and, thereby, incurring financial losses totally approximately $150,000 per month.

Decision

[19] Rule 40.03 provides:

On a motion for an interlocutory injunction or mandatory order, the moving party shall, unless the court orders otherwise, undertake to abide by any order concerning damages that the court may make if it ultimately appears that the granting of the order has caused damage to the responding party for which the moving party ought to compensate the responding party.

[20] The defendant’s evidence concerning the losses it would incur if an injunction is granted was not challenged.

[21] On the basis of rule 40.03 alone I would dismiss the motion. As Professor Berryman has noted, there is no power in the court to order a plaintiff to give an undertaking in damages; the consequence of not offering one is simply to decline to grant the injunction (Jeffrey Berryman, The Law of Equitable Remedies, 2nd ed (Toronto: Irwin Law, 2013) at 50-51).

[22] The motion would also fail on at least two of the three branches of the test in RJR MacDonald, namely a lack of irreparable harm and the balance of convenience.

[23] While I would not at this juncture pronounce that the plaintiff’s claim is devoid of merit, as the defendant submits, it is clear that he must overcome a number of hurdles, not the least of which is to persuade the court that some of the issues that lie at the core of his claim were not already considered and decided by the OMB.

[24] On the issue of irreparable harm, since damages would be an adequate remedy for the plaintiff if his claim against the defendant succeeds at trial, he cannot establish irreparable harm.

[25] The factors tipping the balance of convenience firmly in the defendant’s favour would include the effect of delay in not only on the defendant’s financial interests but, also, the interests of third parties, namely the other returning tenants and prospective occupants of the new building.

[26] For the foregoing reasons the motion is dismissed.

Costs

[27] This matter came before me as an urgent matter. There were, as noted, three attendances by the plaintiff and counsel for the defendant at motion scheduling court. Substantial motion records had to be filed by both parties. The defendant also filed a factum and a book of authorities. This material had to be pulled together in a short time.

[28] While it was appropriate for two counsel to have attended the hearing of the motion, I would not, as the defendant submits, agree that the circumstances warrant an award of costs on a substantial indemnity scale.

[29] Costs are fixed on a partial indemnity scale in the amount of $7,648.22 inclusive of HST and disbursements.

Mew J

Date: 10 March 2014

Correction:

Paragraph 3 was amended to add the word “not” in the first sentence.