Injunctions Against Expropriating Authorities: Law Society of Ontario v Metrolinx

This article was originally published in Municipal Liability Risk Management, January 2024 volume 25 number 2 edition.

When expropriating authorities decide to expropriate land, landowners have limited options to challenge expropriation proceedings. 

The most common recourse for landowners is to request a Hearing of Necessity. A Hearing of Necessity is heard by a member of the Ontario Land Tribunal (the “Tribunal”), who receives evidence and arguments from both a landowner and an expropriating authority, to determine whether the proposed expropriation is “fair, sound and reasonably necessary” in achieving the expropriating authority’s objectives (“Hearing of Necessity”).[1] Although the Tribunal’s findings are non-binding on the approval authority, a Hearing of Necessity provides a fair and independent assessment of a proposed expropriation, and some measure of accountability to the expropriation process.

While landowners have sought injunctions to stop expropriation proceedings,[2] injunctions against expropriating authorities are rare.

However, recent legislative changes in Ontario have eliminated Hearing of Necessity for expropriations related to certain priority transit projects,[3] expropriations related to provincial highway projects,[4] and expropriations of “transit-oriented community land” related to a “transit-oriented community project”.[5] Further, Bill 245 – the Accelerating Access to Justice Act, 2021,[6] when it comes into force, will amend the Expropriations Act to permit the government to make regulations that would exempt more projects from Hearing of Necessity under the Expropriations Act, which could include municipal projects.

The elimination of Hearing of Necessity for many infrastructure projects greatly limits a landowner’s ability to challenge proposed expropriations, which may cause landowners to challenge expropriations through alternative means, including seeking for injunctions against expropriating authorities in the Courts.

This article reviews a recent decision by the Ontario Superior Court of Justice, Law Society of Ontario v Metrolinx[7], which dismissed Law Society of Ontario’s (“LSO”) motion for an interlocutory injunction to stop Metrolinx from removing eleven (11) trees on the Osgoode Hall site. The proceedings arose from the expropriation of a portion of the Osgoode Hall site from the LSO for the construction of the new Ontario Line, a priority transit project under the Building Transit Faster Act, 2020.[8]

Background

The Ontario Line project includes fifteen (15) new subway stations, one of which is Osgoode Station. In order to facilitate the construction of the new Osgoode Station, Metrolinx expropriated a portion of landscaped lawns on the southwest corner of the Osgoode Hall site from the LSO (the “Expropriated Lands”). The eleven (11) trees at issue are located on the Expropriated Lands.

The Osgoode Hall site is designated as a National Historic Site of Canada under the Historic Sites and Monuments Act, RSC 1985, c H-4, and features of the LSO’s property are designated to be of historical and architectural value or interest under the City of Toronto by-laws.[9]

On March 18, 2021, the Minister of Heritage, Sport, Tourism and Culture Industries (the “Minister”) provided consent to Metrolinx to build a station entrance at the Osgoode Hall site, including the permanent removal of mature trees from the Expropriated Lands. The LSO was aware of the Minister’s approval in early 2021, and sought the Minister’s re-consideration of her approval but was ultimately unsuccessful. The LSO did not bring an application for judicial review of the Minister’s decision.[10]

On November 23, 2021, Metrolinx applied to the Ministry of Transportation (“MTO”) to expropriate the Expropriated Lands for the planned Osgoode Station. In response to Metrolinx’s application for approval to expropriate, on January 6, 2022, the LSO sent an email to the MTO to raise its heritage concerns, including the impact of the construction on the trees situated on the Expropriated Lands. On April 25, 2022, the MTO advised the LSO that it had investigated LSO’s concerns and concluded that the proposed expropriation was necessary.[11]

On August 16, 2022, Metrolinx sent Notices of Expropriation to the LSO.[12] The LSO did not bring an application for judicial review of Metrolinx’s decision to expropriate, and on November 30, 2022, Metrolinx took possession of the Expropriated Lands. [13]

Following Metrolinx’s expropriation, the Osgoode Hall site is divided between three (3) owners. The LSO owns the East Wing of Osgoode Hall. Metrolinx owns the Expropriated Lands. The rest of the Osgoode Hall site is owned by the Province of Ontario.[14]

Metrolinx’s Tree Removal

The construction of the new Osgoode Station required the removal of eleven (11) trees on the Expropriated Lands. Metrolinx indicated that it will replace the trees once the construction is completed.

On February 2, 2023, Metrolinx began preparatory work on the Osgoode Hall site, and took steps to cut down the trees on the Expropriated Lands. On February 3, 2023, the LSO issued a Notice of Application before the City of Toronto’s Council under section 33(1) of the Ontario Heritage Act[15] (the “Application”), and brought a motion for an interlocutory injunction restraining Metrolinx from taking any further action on the Osgoode Hall site until the Application has been heard and decided.[16]

In essence, the purpose of the LSO’s interlocutory injunction was to give it “time for further investigation and consideration of alternative sites for the Osgoode Station”.[17]

On the morning of February 4, 2023, the LSO learned that Metrolinx had started cutting down the trees on the Expropriated Lands, with at least one tree being cut down. The LSO sought an urgent hearing for interim injunctive relief. On February 5, 2023, Chalmers J. granted the interim injunction, which was in effect until midnight February 10, 2023, unless it was extended by further order of the Court.[18]

On February 9 and 10, 2023, Hackland J. heard the LSO’s application for an interlocutory injunction against Metrolinx and dismissed the application.[19] Hackland J. applied the well-known test for interlocutory injunction set out in RJR-MacDonald Inc v Canada (Attorney General)[20]. The Court found that the LSO had not established that there was a serious issue to be tried,[21] and was not persuaded that the balance of convenience favoured the granting an interlocutory injunction.[22]

Consultation Process

In the decision, Hackland J. reviewed the consultation process for selecting the Osgoode Station site. Hackland J. found that the LSO consistently took the position that the proposed subway station should be constructed at another location so as not to degrade the heritage features of the Osgoode Hall site, while Metrolinx consistently favoured the Osgoode Hall site.[23]

The Court determined that there was no bad faith in the discussions and consultations,[24] and that Metrolinx took reasonable consultation and lawful steps in planning the Ontario Line project.[25]

On February 1, 2023, a third party review of the Osgoode Station site commissioned by the City of Toronto (the “Parson Review”) was released. The Parson Review determined that the Osgoode Hall site was the most suitable option for the subway station out of the 10 other possible locations.[26]

The Court noted that difficult choices had to be made.[27] There was a compelling public interest in providing a modern subway system in Toronto and equally, an important public interest in preserving heritage sites.[28] However, Hackland J. explained that it is “not the court’s function to determine which site should be chosen for the subway entrance.”[29]

Serious Issue to be Tried

Turning to the first part of the test for interlocutory injunction, Hackland J. reviewed the LSO’s Application under section 33(1) of the Ontario Heritage Act (the “OHA”)[30]. In the Application, the LSO requested that Toronto City Council intervene to stop Metrolinx from using the Expropriated Lands in a manner that “adversely alters” the heritage features of the LSO’s property.[31]

Section 33(1) of the OHA requires an owner of designated heritage properties to seek municipal council’s approval to alter their property in a way that is likely to affect the property’s heritage attributes. Section 33(1) of the OHA provides:

Alteration of property

33 (1) No owner of property designated under section 29 shall alter the property or permit the alteration of the property if the alteration is likely to affect the property’s heritage attributes, as set out in the description of the property’s heritage attributes in the by-law that was required to be registered under clause 29 (12) (b) or subsection 29 (19), as the case may be, unless the owner applies to the council of the municipality in which the property is situate and receives consent in writing to the alteration. 2019, c. 9, Sched. 11, s. 11.

The LSO argued that the Osgoode Hall site is a single indivisible heritage site, with three (3) separate owners: the LSO, Metrolinx and the Province of Ontario.[32] The LSO argued that the proposed Osgoode Station would affect the grounds surrounding Osgoode Hall, which are an important aspect of this historic site.[33] The LSO submitted that as an owner of the single indivisible heritage site, it could apply to Council under section 33(1) of the OHA to restrict the activities of a neighboring landowner, in this case Metrolinx, in a heritage site.[34]

On the other hand, Metrolinx argued that section 33(1) of the OHA does not affect the rights of the owner of a neighbouring property. It indicated that section 33(1) of the OHA does not impose obligations on neighbouring property owners.[35]

Further, Metrolinx submitted that the available remedies set out under section 33(6) of the OHA do not purport to regulate another landowner’s use of its property. [36] Section 33(6) of the OHA simply allows City Council to consent, consent on terms, or refuse the Applicant’s (i.e. LSO’s) request to alter or permit the alteration of heritage attributes of its property.[37]

Metrolinx also argued that section 33 of the OHA is contained in Part IV of the OHA, which does not govern property owned by the provincial Crown or “prescribed public bodies” such as Metrolinx. In contrast, the provincial Crown and prescribed public bodies are governed by Part III.1 of the OHA. Therefore, Metrolinx argued that the “legislature has established a specific limitation on [City] Council's ability to designate and regulate property that is owned by the Crown.”[38]

The LSO acknowledged that that it was seeking a “novel application” of section 33(1) of the OHA to restrict the activities of a neighbouring landowner in a heritage site, more particularly a Crown corporation such as Metrolinx.[39] However, the LSO argued that its Application can still apply to Metrolinx, because “Metrolinx’s proposed conduct will adversely affect the heritage attributions of a single indivisible heritage site, including the property remaining under Law Society’s ownership.”[40]

Hackland J. rejected the LSO’s submissions, and agreed with Metrolinx that section 33(1) of the OHA has no application to Metrolinx’s property or to the proposed subway project.[41] The Court found that the concept of a single indivisible heritage site is not a concept found in the OHA and is inconsistent with the provisions of the statue:

“The OHA is based on individual ownership of heritage property and provides a separate process for approvals for prescribed public bodies, such as Metrolinx. There is no basis in the OHA for according City Council the right to control or restrict the use of heritage properties owned by public bodies. That power rests with the Minister of Heritage and these required approvals have been obtained by Metrolinx.”[42]

In finding that the LSO’s Application could not succeed in obtaining any relief that would stop Metrolinx from constructing the subway on the Expropriated Lands, Hackland J. found that the LSO had failed to establish a serious issue to be tried. Accordingly, the Court dismissed the LSO’s application for an interlocutory injunction.[43]

Balance of Convenience and Irreparable Harm

Hackland J. also considered the issues of balance of convenience and irreparable harm. The Court was not persuaded that the balance of convenience favoured the granting of an interlocutory injunction for the reasons summarized below:

• The proposed injunction would delay and undermine a major public transportation project.
• The harms to the Osgoode Hall site could be significantly mitigated.
• Renewed consultations would prolong and repeat a process that had already taken place, and would almost certainly prevent Metrolinx from handing over the site to the project consortium on time to commence construction, thereby potentially triggering major financial penalties.
• There was strong evidence that the only potentially viable alternative site was sufficiently close to the Expropriated Lands. Even if the alternative site was selected, the Expropriated Lands would be needed for construction anyways, with the same need for tree removal.[44]

Immediately after this case, Hackland J. also heard and dismissed another injunction brought by Haudenosaunee Development Institute against Metrolinx related to the Osgoode Station.[45]

Conclusion

The recent legislative changes that eliminated Hearing of Necessity for many infrastructure projects may result in more motions for injunctions against expropriating authorities in the future.

In this case, while the interlocutory injunction sought was to stop Metrolinx from cutting down the eleven (11) trees on the Expropriated Lands, what the LSO sought to achieve by obtaining an interlocutory injunction was more time to further investigate and consider alternative sites for the Osgoode Station.[46] In other words, the LSO wanted more time to demonstrate that the expropriation of the Osgoode Hall site was not necessary, because there were other suitable locations for the Osgoode Station.

Since Metrolinx’s expropriation was for the construction of the Ontario Line, a priority transit project under the Building Transit Faster Act, 2020,[47] the LSO did not have the right to request a Hearing of Necessity. Instead, the LSO wrote to the approval authority, the MTO, regarding its concerns with the proposed expropriation, to which the MTO responded that the proposed expropriation was necessary.

If the LSO had the right to request a Hearing of Necessity before the expropriation, the LSO would have had the opportunity for a neutral third party (ie. the Tribunal) to determine whether the expropriation of the Osgoode Hall site was “fair, sound and reasonably necessary” for the Osgoode Station. The LSO would have had the ability to provide evidence on alternative sites for the Osgoode Station at the hearing. If a Hearing of Necessity had occurred, it is possible that this injunction could have been avoided.

Without the right to request a Hearing of Necessity, landowners may be more inclined to challenge expropriations in the Courts. However, as Hackland J. explained, while the Courts could consider “if reasonable consultation and lawful steps have been taken in the planning” of an infrastructure project, “it is not the [C]ourt’s function to determine which site should be chosen”[48] for the project. Therefore, while the Tribunal could consider evidence on the necessity of an expropriation in a Hearing of Necessity, the Courts are limited in what it could consider when a landowner challenges an expropriation in the Courts.

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