DATE: 20010418

DOCKET: M27171/C35719

COURT OF APPEAL FOR ONTARIO

RE: CITY OF TORONTO (Applicant/Respondent in Appeal) v. 1291547 ONTARIO INC. and 1291549 ONTARIO INC. (Respondents/Appellants)

BEFORE: OSBORNE A.C.J.O.

COUNSEL: Raj Anand for the appellants

Andrew Weretelnyk and Roberto Zuech for the respondent

HEARD: April 11, 2001

E N D O R S E M E N T

[1] By notice of application dated May 9, 2000, the City of Toronto (the “City”) sought, among other things, a declaration that the respondent, 1291549 Ontario Inc. is using and the respondent 1291547 is permitting the use of the second and third floors of premises located at 1900 Lakeshore Blvd. West, the Meow Restaurant and Lounge, as an entertainment facility, contrary to the City’s zoning by-law.

[2] The appellants, by cross-application, sought a declaration that the zoning by-law in question was void for vagueness.

[3] On September 14, 2000, Cullity J. ordered that the City’s application for a declaration that the premises were being used in a manner which violated the City’s zoning by-law and the appellants’ cross-application should proceed by application, that is on written material, and that there be an expedited trial of the issue whether the appellants should be permanently enjoined from operating the Meow Restaurant and Lounge as an entertainment facility, assuming of course that the appellants were found to have breached the zoning by-law.

[4] The application with respect to the appellants’ alleged breach of the City’s zoning by-law was heard by Nordheimer J. on December 10 and 11, 2000. In his reasons, released on December 21, 2000 (now reported at 2000 ONSC 22398, 2000 49 O.R. (3d) 709), he concluded that the use of the second and third floors of the premises violated the provisions of the City’s zoning by-law. He also found that in the context of the appellants’ business operation, the by-law was not vague or ambiguous.

[5] Since the release of Nordheimer J.’s reasons, the Meow Restaurant and Lounge has continued to operate as it always has, except for a brief period in January 2001 when the business was operated by a Receiver. Meow continues to levy a cover charge to patrons using the second and third floors. The main activities on the second and third floors continue to be dancing and drinking.

[6] The appellants have appealed from Nordheimer J.’s order in which he declared the Meow operation at the premises in question violated the City’s zoning by-law and in which, on the appellants’ cross-application, he found that the City’s zoning by-law was not void for vagueness.

[7] Further to Cullity J.’s order, on March 21, 2001, the parties appeared before Backhouse J. to schedule the trial of the remedy-related issues. The appellants sought to delay the trial of the remaining issues until their appeal from Nordheimer J.’s order had been heard. That appeal was perfected in March 2001, but it has not been scheduled for oral argument. Backhouse J. did not accept the appellants’ submission that the trial of the issues directed by Cullity J. be deferred until this court dealt with the appellants’ appeal from that part of the City’s application which was dealt with on affidavit evidence by Nordheimer J. The City took a different position. It contended that the trial of the remaining issues should proceed notwithstanding the appellants’ pending appeal. In the end, Backhouse J. directed that the trial of the remaining issues commence on May 14, 2001. However, she specifically endorsed the trial record that the trial was scheduled for May 14th without prejudice to the appellants’ right to seek a stay pending appeal, including a stay of the trial itself, from a judge of the Court of Appeal.

[8] What the appellants are really seeking on this motion to stay is the adjournment of a trial scheduled to commence on May 14, 2001 by direction of Backhouse J. The appellants approach this matter on the basis that if they are successful on their now perfected appeal, the trial will be unnecessary because the substratum for the remedy issues which will be before the Superior Court on May 14, 2001 will have been removed. Thus, the appellants contend that I should stay Nordheimer J.’s declaration that the appellants’ business operation at 1900 Lakeshore Blvd. West violates the provisions of the City’s zoning by-law. They emphasize the costs that they will incur in proceeding with the expedited trial.

[9] To the extent that I might look at the issue before me as a disguised application to a judge of the Court of Appeal for Ontario to adjourn a trial, I say simply that I do not think it is my business to determine when trials will take place in the Superior Court. To the extent that this motion can reasonably be viewed as a motion to stay Nordheimer J.’s order, I am not persuaded that the order sought should issue, for the following reasons.

[10] On the material before me (material which does not reveal the source of the information contained in the appellants’ solicitor’s affidavit. See Rule 39.01(4)), there appears to be very little dispute as to the appellants’ business use of Meow’s second and third floors. It seems to me that the appellants have not established that there is a serious issue to be adjudicated on in the appeal or that there is a strong prima facie case that Nordheimer J. erred in issuing the declaration that he did. The appellants, in my view, have not met the first requirement for a stay.

[11] The appellants are carrying on business as per usual. That is to say, Nordheimer J.’s order has not changed their normal business operations. The only harm to which the appellants may be exposed that is worthy of consideration is the expense that they will incur if the trial goes ahead on May 14th and it is later determined by this court that there was no proved breach of the City’s zoning by-law or that the by-law is void for vagueness. In my opinion, any harm suffered by the appellants can be taken into account in costs or damages. In the circumstances, I see no irreparable harm.

[12] If the trial scheduled for May 14th is adjourned pending the appeal, and the appeal is dismissed, the adjourned trial may then result in a second appeal which should in my view, as a matter of efficiency, be heard by the same panel that hears the first appeal. This will create serious scheduling problems in this court. In addition, there is a public interest in seeing that by-law infractions are dealt with expeditiously. I assume that is why Cullity J. ordered that the trial of the remedy issues should be expedited. It seems to me that the balance of convenience favours disposing of the remedy issues expeditiously, consistent with Cullity J.’s order.

[13] There is no doubt that the order bifurcating the appellants’ application has created problems, almost all of an economic variety. However, that the balance of convenience supports the conclusion that the Superior Court should complete the adjudication of the issues raised in the City’s application and then both the liability and remedy issues can be dealt with in one appeal by one panel of this court, assuming that the appellants lose on the injunction issues. To that end, I do not think that the appeal from Nordheimer J.’s judgment should be scheduled for oral argument until the May 14th scheduled trial of an issue has been completed. Sufficient time should be given to the appellants to expand their appeal to include any appeal they might wish to take from any order made on the trial of the issue directed by Cullity J. In that way, a single panel of this court will deal with the issues arising from the City’s application.

[14] The motion for a stay is, therefore, dismissed with costs.

“C.A. Osborne A.C.J.O.”