COURT FILE NO.: CV-20-00652412
DATE: 20201203
ONTARIO SUPERIOR COURT OF JUSTICE
RE: CANADIAN APPLIANCE SOURCE LP, Applicant
-and-
ONTARIO (ATTORNEY GENERAL), HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, THE CITY OF TORONTO and REGION OF PEEL, Respondents
BEFORE: F.L. Myers J.
COUNSEL: Eli Karp, for the Applicant Brent McPherson and Court Peterson, for the Attorney General Jayme Corcoran and Louise Aubin, for the Region of Peel Colleen Grant, for the City of Brampton Georgia Tanner, for the City of Toronto Daron Earthy for the City of Mississauga
HEARD: December 3, 2020
ENDORSEMENT
Background
[1] The applicant is one of Canada’s largest home appliance retailers. It operates 29 showroom/retail stores in six provinces. It also sells its appliance products online.
[2] On November 27, 2020, a Peel bylaw officer ordered the applicant to close its Mississauga showroom under the Covid-19 regulatory regime currently in place.
[3] On November 28, 2020, a Brampton bylaw officer ordered the applicant to close its Brampton showroom.
[4] On December 1, 2020, a Toronto bylaw officer ordered the applicant to close its Etobicoke showroom and advised that its North York showroom is under investigation.
[5] December is retailing high season. The applicant expects approximately 30 customers per day to attend each of its showrooms. It projects over $27 million of revenue in Ontario this month. The Mississauga showroom alone is projected to have sales of over $1.1 million if it is open in December.
[6] The applicant commenced this application yesterday, December 2, 2020, to claim an injunction requiring the governments to allow it to open. It says it operates “hardware stores” that are exempt from mandatory closure under the express terms of the applicable regualtion.
[7] The applicant has also delivered evidence concerning its efforts to ensure that customers and employees in its showrooms are well protected from the Covid-19 virus. It has installed physical separations. It requires masks at all times. It has hand sanitizer available. It practices social distancing.
Scheduling
[8] The court convened an urgent case conference to schedule a hearing of a motion for an interlocutory injunction pending the final return of the application.
[9] The motion for interlocutory relief is booked for Tuesday, December 8, 2020 at 10:00 a.m. by Zoom.
[10] The governments who choose to deliver evidence shall serve Mr. Karp with their motion records by email no later than noon, Sunday, December 6, 2020. Any government who wishes to participate in the hearing shall serve a factum on Mr. Karp by email by 4:00 p.m. Monday, December 7, 2020.
[11] Mr. Karp will be responsible to upload all material received from all parties to a folder on Sync.com for use at the hearing. He should provide the link to the folder to the court on Monday, December 7, 2020. The parties shall also file their material through the Civil Claims Online Portal in due course.
[12] Depending on the parties’ ability to turn their evidence and legal arguments quickly, it may be that the final hearing can be held on December 8, 2020. The process to be followed will be an issue for the judge at the hearing.
Request for Interim Relief
[13] The parties were notified in the endorsement convening this case conference that the court would consider scheduling including terms for interim relief under Rule 50.13 (6).
[14] The applicant asks for an order allowing it to open its stores between now and the hearing Tuesday next. The usual three-part test applies to requests for interim relief as it does to requests for interlocutory relief.
Is there a Serious Issue to be Tried?
[15] There is a serious issue to be tried. The applicant points to the federal government’s definition of essential services and notes that retail workers engaged in the chain of commerce of home appliances are classified as providing essential services. How relevant that may be to the interpretation of the provincial regulations and municipal bylaws is a question.
[16] The definition of a “hardware store” is also in issue. The applicant points to dictionary definitions that it says support it case. It also notes that big box appliance retailers are being allowed to open in all three municipalities. I do not know if this is an issue that requires evidence or not.
[17] The issue for interpretation is whether a retailer of appliances is a “hardware store” within the meaning of the current regulations. That is not a frivolous issue.
Will the Applicant suffer “Irreparable Harm” if it is not allowed to Open?
[18] The applicant says that it will suffer loss of revenue in the order of $500,000 if its stores are not open this weekend. How speculative that may be is an evidentiary question that may involve assessing how fungible in-person sales and online sales may be. It may also turn on whether customers have competitive alternatives or whether they will likely just wait for the applicants to re-open when the current shutdown ends.
[19] The applicant notes that if it suffers losses as a result of being wrongly shut down by the government, its losses will not be easily recoverable. No government counsel before me today pointed to a ready mechanism for a business to obtain compensation for being wrongfully shut down under the Covid-19 regime. One may exist in the legislation being relied upon by the government or at common law. But I am not aware of any at this moment.
[20] The applicant also says that under the regulatory regime, the governments have shut it down without having to undertake to pay its damages as it would in a civil proceeding. The regulation has cast the burden on the applicant to move for relief.
[21] Although the applicant’s alleged losses are monetary, in the absence of a mechanism for it to seek compensation, it seems to me that the losses, if any, may well amount to irreparable harm.
What is the “Balance of Convenience”?
[22] In assessing the “balance of convenience”, the court will look at the potential harm to the applicant if there is no injunction granted and compare it to the potential harm to the respondents if an injunction is granted. The court tries to determine which side will suffer the worse harm and where the equities lie as between or among the parties.
[23] The applicant argues that without an injunction it will suffer very significant and potentially non-compensable losses. However, if it is allowed to open, the risk of Covid-19 transmission to employees and customers who attend its showrooms between now and Tuesday will be minimal. Mr. Karp submits that the gulf between the near certainty of significant economic loss and the very low risk of transmission of the virus, tips the balance of convenience in the applicant's favour.
[24] However, this case involves the public interest and not just the private concerns of the applicant and its customers in its showrooms. The governments are seeking to enforce a regulatory regime to protect public health. The public interest is a proper consideration when a party seeks exemption from existing legislation. See: Manitoba (A.G.) v. Metropolitan Stores Ltd., 1987 CanLII 79 (SCC). While that case involved a constitutional exemption, the same principle applies here.
[25] Mr McPherson argues that it would be inappropriate for the court to decide on the public interest within 24 hours of the commencement of the litigation and before any government has the opportunity to put public interest evidence before the court.
[26] If the issue was simply the risk to people in the applicant’s showrooms, I might be more amenable to its claims. There are only 30 customers on average expected to attend very large showrooms each day.
[27] However, I have little understanding of the public interest assessment behind the Covid-19 regulatory regime. Everyone sees the apparent unfairness of small stores closing while big box stores remain open. Are there issues about trying to change the public’s habits during the shutdown? That is, are stores shut down not just for the risks they present, but to try to get people to see that it is not business as usual and they should stay home? Even if apparently unfair, has the government made a policy choice to favour a small number of very large stores to contain risks while people do necessary shopping? If the applicant's stores stay open, does that have a cascading effect on others or undermine the containment effort?
[28] There appears to be a battle for the hearts and minds of the public between public health advocates and others with different priorities? If I grant the relief sought by the applicant, will the court be affecting the balance and possibly increasing the risk of spreading of the virus?
[29] In my view, given the severity of potential consequences to the public at large, it would be irresponsible of me to wade into these issues without a much better understanding of the countervailing public health issues. During the case conference I advised the governments that it may be desirable for them to adduce evidence addressing specifically the rationale for the current approach. They may or may not do so.
[30] As sensitive as I am to the potential losses being suffered by the applicant (and others including small businesses who can ill-afford yet further losses in this horrible year) at this stage of the proceeding, I am of the view that the public interest must be paramount even if the applicant is suffering non-compensable losses. There will be time to assess responsibility to pay later. I do not accept that the risk posed by the Covid-19 virus to the public is limited to assessing the measures put in place in the applicant’s showrooms.
[31] I note specifically that I am dealing with a motion brought on virtually no notice and with no time for the governments to respond with evidence. Whether the same calculus applies next week or whenever the application is heard on its merits, will be determined on the evidence and arguments made at that time.
[32] Accordingly, I declined to grant interim relief at this time.
F.L. Myers J.
Date: December 3, 2020