Curactive Organic Skin Care v Ontario: St. Clair West Streetcar Class Action Hits Roadblock

I apologize for the at-times-Toronto-centric nature of this blog, but public transit in Rob Ford’s Hogtown is too contentious an issue to ignore. Though this case stems from the before-Ford era, the issues that it considers are as pressing today as ever. Back in 2003—under the leadership of Mel Lastman, of all people—the City of Toronto decided to expand the TCC. First order of business: replace the St. Clair West streetcar with something that looks a whole lot like light-rail transit, but apparently isn’t.

This essentially meant that the streetcar would have its own dedicated, no-cars-allowed track. Naturally, the project would involve a considerable amount of construction. Water and natural gas mains would have to be upgraded, hydro wires would have to be buried, and the tracks themselves would have to be…well, you know, constructed and whatnot. City Council gave the project a budget of $48 million.

As is generally the case with a city project of this size, public outrage ensued. It wasn’t just the level of expenditure that pissed people off—although they were right to be skeptical, as the cost apparently ended up at well north of $100 million. There was also a widespread feeling that the City and the TTC had failed to properly consult local residents and business owners. Curactive Organic Skin Care, the representative plaintiff in this case, was one of those local shops.

On behalf of St. Clair West’s storefront businesses, and against the City and the TTC, Curactive filed a class action lawsuit with the Ontario Superior Court. Their argument was not simply that local business interests had been neglected, but that they had been grossly neglected “with hostility, deflection, dismissive arrogance, misrepresentation, and callous indifference.” Curactive’s statement of claim put it this way:

This policy of blockbusting is especially sinister because it unlawfully targets the weak, including many recent immigrants whose commercial interests are thinly financed and precarious in the best of times. Such people often have severe distrust of authority, fear reprisals from civic officials and servants, and extremely limited borrowing capabilities that often extend to their personal and family assets. This policy is in direct violation of Canada’s, Ontario’s and Toronto’s celebration and promotion of multiculturism and, in its design to cause harm by effectively destroying these businesses, is an abuse of public authority, an intentional interference with economic relations and an intentional betrayal of the duty owed by Toronto to its citizens to safeguard and advance their lawful economic needs.

As this statement makes very clear, Curactive believes that the City was maliciously busting their block, paving over struggling immigrant businesses to make way for fancy, tax-revenue-generating stores like Starbucks. The statement of claim then goes on to specify the alleged damages suffered as a result of the construction. At times, Curactive reminded the court, there was no sidewalk, no parking and, somewhat ironically, absolutely no TTC access. Over 200 businesses were (allegedly) forced to shut down, while many other long-time shop owners were left struggling.

The problem, though, is that Curactive’s claim looked a whole lot like a cause of action known as “injurious affection.” Broadly speaking, it refers to business damages or a reduction in land value resulting from the “construction of the works” by a statutory authority. Not only does injurious affection fall under the authority of Ontario’s Expropriations Act, RSO 1990, c E.26 (s. 2), but the Act also sets out the process through which these claims should be pursued.

In particular, the Act specifies that the Ontario Municipal Board hear these injurious affection claims before an appeal can be made to the Divisional Court. As such, it is not surprising that the defendants brought a motion—pursuant to rule 21.01(3)(a)—for an order dismissing Curactive’s action on the grounds that the Ontario Municipal Board has exclusive jurisdiction over this claim. It is equally unsurprising, I would say, that Justice Perell agreed, finding in favour of the defendants.

On February 7, the Ontario Court of Appeal dismissed Curactive’s appeal, offering a short yet crisp endorsement of Justice Perell’s decision. It is important to remember, the Court of Appeal notes, that the Class Proceedings Act, 1992, SO 1992, c 6, is a “procedural statute and does not confer substantive law jurisdiction on the courts.” As such, it is the substance, not the form, of the claimants pleadings that governs judicial jurisdictional. No matter what Curactive calls it, the claim here is one of injurious affection.

The only possible exception, the Court of Appeal concedes, is the allegation of intentional harm, which doesn’t really fall under the normal purview of injurious affection. Rather, it can be more aptly characterized as “misfeasance in public office.” While such a cause of action may be considered first in court, Curactive’s pleadings are not sufficiently detailed—in other words, they make no specific allegations of improper conduct. Thus, the Court of Appeal has an easy time dismissing the claim, pursuant to rule 21.01(1)(b), on the ground that does not constitute a valid cause of action.

Resources permitting, I would assume that this blockbusting claim makes its way to the Ontario Municipal Board. And just as this claim will continue, so too will the controversy that surrounds all things TCC. The dust has settled, however, on the St. Clair West project, and whether you are a now-furious business owner or a now-speedy streetcar rider, you should all be thankful that Stockyards Smokehouse & Larder (St. Clair and Christie) made it through unscathed. I would recommend the “BAT” sandwich, with “cured bacon, Arugula, fried green Tomato, lemon aioli on a ciabatta roll.”