Executive Summary: Key Legal and Evidentiary Issues

• Applicants sought to prevent interference with their registered easement over a laneway essential to auto dealership operations.

• The court applied the RJR-MacDonald test for an interlocutory injunction: serious issue, irreparable harm, and balance of convenience.

• Evidence showed the Applicants had previously accepted limited laneway access in a Memorandum of Understanding, weakening their claim of irreparable harm.

• Easement was granted for ingress and egress only, and not for parking, deliveries, or other expanded uses claimed by the Applicants.

• Photographic and affidavit evidence indicated that operational disruptions could be mitigated through reasonable adjustments.

• The balance of convenience favoured allowing construction of a $200M long-term care home on the Respondent’s property.

Factual background and procedural history

The Applicants, 1654199 Ontario Limited and 1888818 Ontario Limited, are related to AWIN, a group operating four automobile dealerships—Volvo, Honda, Acura, and Volkswagen—on a property in Toronto. Their property benefits from an easement over an adjacent laneway (Part 4 on Plan 66R-21806) originally owned by Ontario Realty Corporation (ORC) and later sold to the Respondent, The Rekai Centres, a non-profit developing a long-term care facility on its newly acquired land.

The easement was registered in 2005 for pedestrian and vehicular ingress and egress between the Applicants’ property and two nearby streets. The Applicants have used the laneway for multiple purposes beyond ingress and egress, including service vehicle entry, deliveries by large trucks, customer parking access, garbage collection, and entry to utility infrastructure. In 2022, both parties signed a Memorandum of Understanding (MOU) agreeing on access limitations during construction in exchange for removing a restrictive covenant on the Applicants’ land. The MOU terminated in 2023 but included surviving provisions related to use of the easement.

In 2025, The Rekai Centres began preparing the laneway for construction, including erecting a fence that narrowed access. The Applicants responded by filing an urgent motion for an interlocutory injunction to prevent any restriction of their easement rights.

Legal analysis and application

Justice Papageorgiou applied the RJR-MacDonald v. Canada (AG) framework, requiring the Applicants to establish: (1) a serious issue to be tried, (2) irreparable harm, and (3) that the balance of convenience favoured granting the injunction.

On the first issue, the court found a low bar and accepted that a serious issue existed regarding whether the Respondent’s proposed construction interfered with the easement. However, the scope of the easement was limited to ingress and egress, and not parking or delivery stoppage. Much of the Applicants’ use—such as deliveries by 18-wheel trucks and parking—likely exceeded the easement’s intended scope.

On irreparable harm, the court concluded that the Applicants failed to meet the threshold. The Applicants had previously agreed in the MOU that access to 11 feet of the laneway was sufficient, whereas the Respondent’s construction would reduce access to 10 feet 8 inches—only four inches less. The Applicants had acknowledged they could reconfigure part of their own 20-foot strip of land to accommodate the reduced width, but offered no specifics about the cost or timeline. The court found that any harm resulting from access changes, delivery disruptions, or customer inconvenience could be quantified in damages.

The court was unpersuaded by the Applicants’ claims of potential operational shutdown or employee job loss, finding no detailed evidence supporting such outcomes. It also found that temporary closures of either end of the laneway for storm sewer work could be reasonably managed with advance notice, as offered by the Respondent.

On the balance of convenience, the court held that halting construction of a $200 million long-term care facility—critical to public health infrastructure—was not justified on the basis of disruptions that the Applicants had already agreed to accommodate in the past. Since both parties had previously engaged in good faith negotiations, the court encouraged cooperation and granted the Applicants reasonable time to adjust their property to the anticipated changes.

Conclusion

The Ontario Superior Court of Justice dismissed the Applicants’ motion for an interlocutory injunction. The decision allows the Respondent to proceed with development of the long-term care facility while obligating it to provide the Applicants sufficient time to reconfigure their property to accommodate the reduced laneway width. The court emphasized the need for both parties to act reasonably and cooperate as neighbouring landowners.