OCA to Consider Jurisdiction of Superior Court Over Construction-Related Claim Against Municipality

Summary

The OCA will soon decide whether the Ontario Superior Court, as opposed to the Ontario Municipal Board, has jurisdiction over a claim by a class of failed businesses against a municipality for damages flowing from a local construction project.

Decision

The case involved a construction project by the City of Toronto and the Toronto Transit Commission to replace a streetcar line in the city. The project included enhanced streetscape, the upgrading of water and natural gas mains, and the burial of hydro lines. There was public resistance to the project and a process of public consultation.

The representative plaintiff, for a class of 200 failed businesses, alleged, among other things, that the City and the TTC proceeded carelessly with the project, which was poorly supervised, and mismanaged. The project allegedly caused, among other things, nuisance to the surrounding businesses, power disruptions, sewage back-ups and loss of business. According to the claim, the project caused the class of 200 businesses to fail. The defendants brought a motion to the Court to strike out the claim on the basis that exclusive jurisdiction over the claim vested in the Ontario Municipal Board. In particular, the defendants submitted that, in substance, the claim was one of “injurious affection” under the Expropriations Act. The defendants submitted that the Expropriations Act provided the Ontario Municipal Board with exclusive jurisdiction over claims of injurious affection. The Court agreed with the defendants and struck out the statement of claim.

According to the Court, injurious affection under the Expropriations Act is designed to provide compensation to those who suffer loss as a result of the nuisance of a statutory authority who, at common law, is immune from liability flowing from the inevitable consequences of construction authorized by statute. While the representative plaintiff was specifically alleging negligence and gross negligence in this case (as opposed to "inevitable consequences"), the Court held that injurious affection was subsumed within that claim. According to the Court, even without the negligence, there would have been business disruptions that may have been compensable under the injurious affection provisions of the Expropriations Act. Given that the Ontario Municipal Board was given exclusive jurisdiction to deal with these claims under the Act, and given damages from injurious affection were subsumed within the claim as pled, the Court concluded that it lacked jurisdiction.

Potential Significance

This case will provide the Ontario Court of Appeal with an opportunity to consider the interplay between an ordinary claim of injurious affection (where a plaintiff seeks compensation for the ordinary disruptions caused by statutorily-authorized construction), and claims alleging simple or gross negligence against a statutory authority in the implementation of a construction project. The Court will be asked to consider whether it is proper for the Superior Court to divest itself of jurisdiction in cases where a plaintiff’s attempt to establish a claim in negligence may also subsume within it a claim for which an administrative tribunal has jurisdiction.

Case Information

Curative Organic Skin Care Ltd. v. Ontario, 2011 ONSC 2041 (CanLII)

Appeal Date: January 19, 2012

City of Toronto Expropriations Act injurious affection Ontario Court of Appeal Ontario Municipal Board Toronto Transit Commission

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