Discrimination Exists Even in Commercial Tenancies

Those protesting from “diversity fatigue” often complain that some people will find indicia of subtle racism in almost everything. It’s like they dispute that these influences are subtle and pernicious, and can be found throughout the social fabric of our society.

Fortunately the courts in Ontario disagree, finding in a commercial tenancy dispute in Elias Restaurant v. Keele Sheppard Plaza Inc. regarding a refusal by the landlord to renew a commercial lease. The concept of “prejudice” as used in litigation rarely encompasses the term as it is popularly used, but its application in this case weighed in favour of the tenant’s claim for relief from forfeiture and injunction from eviction.

The tenant was a restaurant in the Keele/Sheppard area of Toronto, served “African/Black/Caribbean cultural foods, is licensed by the LCBO to serve alcoholic beverages, and caters to a primarily, but not exclusively, Black community customer base.” The landlord made numerous disparaging remarks about the restaurant and the type of clientele that it attracted. Justice Morgan analyzed this remark in the following context,

[33] Generally speaking, a trier of fact can take judicial notice of facts that are “so notorious or generally accepted as not to be the subject of debate among reasonable persons”.[5] To this I would add the observation that, “The existence of anti-black racism in Canadian society is not the subject of debate among reasonable people.”[6]

[34] The Landlord’s counsel takes some umbrage at the allegation of racism against his clients, and submits that there is nothing in the record to establish that the Landlord or Manager were racially motivated. Motivation, however, is not the point here. Identifying a family-run restaurant as not family-friendly, and impugning a restaurant-bar for serving “liquor” and having smokers stand outside the premises, all point to a mindset that condemns the minority population for what is considered normal behaviour for the majority population. On this point, the Court of Appeal has observed that although racial stereotyping may not be conscious, it is nevertheless real: “For some people, anti-black biases rest on unstated and unchallenged assumptions learned over a lifetime. Those assumptions shape the daily behaviour of individuals, often without any conscious reference to them.[7]
[emphasis added]

The emergence of anti-Black racism in a commercial real estate deal may appear to be a surprise, but it also serves to illustrate how concepts of equity, diversity, and inclusion (EDI) remain essential elements of competence to the practice of law in the modern era. Some commercial real estate lawyers have also lamented the need for mandatory EDI education hours, questioning its relevance for their practice.

Justice Morgan adequately addressed many of these contemporary issues in this decision, stating,

[36] In its landmark decision in R. v. Parks,[9] the Court of Appeal made reference to sociological studies which establish the typical prejudice brought to bear by jurors against Black defendants in court proceedings. The testimony of the Landlord and his contractor as to the “unattractive” nature of the Tenant’s clientele to other users of the Plaza bears close resemblance to these longtime, well-known biases. As Justice Tulloch has noted, “Members of Black communities also recount a long history of discrimination, oppression, and marginalization, the effects of which resonate to this day.”[10]

[37] The urgency of recognizing these societal facts has only increased since the Parks decision some 25 years ago. In 2016, the Law Society published its the Final Report on Challenges Faced by Racialized Licensees (Working Group, Equity and Aboriginal Issues Committee), in which lawyers were admonished, at pp. 5-6, to work toward, inter alia, inclusive workplaces in Ontario and reduction of societal barriers created by racism, unconscious bias and discrimination.

The principle which the Law Society pronounced can be extended to include Black businesspeople such as the Tenants, who often face discrimination challenges unique to their position in society. The Prime Minister of Canada has echoed this view in a recent policy announcement, making the prescient observation that Black entrepreneurs require “justice against a system that has locked out far too many Black entrepreneurs and denied them the same opportunities as other Canadians.”[11]
[emphasis added]

This particular business was commendable because it had thrived during the pandemic, shifting to take-out orders. The owners had never missed paying the increased base rent, or taxes, maintenance and insurance (TMI), even while other restaurants in the city have struggled for years, even prior to the pandemic, to keep up with such increases. Overcoming these operational barriers, the tenants were stuck facing barriers of a different kind.

Justice Morgan characterized the landlord’s stated intent to replace the restaurant with a more lucrative medical office as purely speculative, and noted that the disparaging comments around the liquor license were strange given the zoning for the plaza included such use.

The case remains an excellent example of the pervasive nature of such stereotyping, and the need for the profession to engage in regular, frequent, and difficult introspection, in all of our practices, even where there challenges may not on first instance appear to play a role.

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