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Friday, August 26, 2011

Court says injurious affection claim to be decided by OMB, not in a class action

In 2003, the City of Toronto began a major expansion of its public transit system, and the City and the Toronto Transit Commission (“TTC”) planned a project to replace the existing streetcar line on St. Clair Ave. West with a light rail transit system.  The St. Clair Project involved reconstructing the existing streetcar tracks on St. Clair West from Yonge Street to the Gunns Road loop in the form of a dedicated streetcar right-of-way that separates the centre two lanes from the roadway.   Construction of an enhanced streetscape, the upgrading of water and natural gas mains, and the burial of hydro wires along St. Clair West were undertaken concurrently with the TTC’s work on the St. Clair Project.

Curactive is a corporation that for 30 years has carried on business as a hair salon in the City of Toronto at 1063 St. Clair Avenue West.   Curactive is a putative representative plaintiff for a wide range of commercial enterprises including restaurants and retail and service business that carry on business on St. Clair Avenue West from Bathurst St. to Old Weston Rd. 
 
In a proposed class action claim, Curactive pleaded that:
  • the project was not properly supervised, and it was mismanaged and uncoordinated. The contracting and subcontracting process was badly mishandled. There was confusion and there were costs overruns and substantial delays and ongoing disruptions of access to and from the affected community. 
  • the concerns of the local business community were ignored with hostility, deflection, dismissive arrogance, misrepresentation, and callous indifference at both the City and the TTC.
  • the TTC negligently or gross negligently constructed the St. Clair Ave. West project.
  • the City is liable for damages in public abuse of authority and gross negligence, or alternatively negligence.
  • the City deliberately seized upon the delays in the St. Clair project as a means to harm the existing businesses on St. Clair and as a means to have them replaced by new upper scale businesses that would attract more tax revenues for the City, which was desperate for revenues. This means was also allegedly used as a part of the City’s “war on cars,” where factions on City Council sought to discourage vehicle use in the City.
  • the City covertly and unlawfully adopted an internal policy of “blockbusting” to intentionally cause harm to affected business along St. Clair Ave. West.
Justice Paul Perell of the Ontario Superior Court of Justice dismissed Curactive's action, finding that it was a claim for injurious affection falling within the exclusive jurisdiction of the Ontario Municipal Board (OMB).  The Expropriations Act provides for compensation for injurious affection and the sole venue for determining that compensation is the OMB.  Curactive argued that its proposed class action should be permitted to proceed because the Expropriations Act and the OMB do not ordinarily provide for class claims to be made.  Justice Perell ruled that the Class Proceedings Act, which governs class actions in Ontario, could not confer substantive jurisdiction to the Court over an issue within the exclusive jurisdiction of another tribunal - the Act is procedural only.
 
Read the decision at: Curactive Organic Skin Care Ltd. v. Ontario.