COURT FILE NO.: 318/05, 319/05, 320/05, 321/05

DATE: 20070328

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

LANE, CARNWATH AND HIMEL JJ.

B E T W E E N:

CITY OF TORONTO

Applicant

• and -

SI NAM NG AND WAI CHAN, Operating as CANTONESE STIR FRY RESTAURANT and the TORONTO LICENSING TRIBUNAL;

1081162 ONTARIO LTD, Operating as CHU KWONG RESTAURANT and the

TORONTO LICENSING TRIBUNAL;

TUYET MAI HUA, Operating as GOLDEN BULL RESTAURANT and the TORONTO LICENSING TRIBUNAL;

WING SING KWAN, Operating as JUMBO CHINESE COMBO (a.k.a. JAN BAO DELIGHT) and the TORONTO LICENSING TRIBUNAL

Respondents

Rosanne Giulietti, for the Applicant

Arlen K. Sternberg and Sandeep J. Joshi, for the Respondent Toronto Licensing Tribunal

HEARD: March 13, 2007

ENDORSEMENT

HIMEL J:

1The City of Toronto applies for judicial review of the decisions made by the Toronto Licensing Tribunal concerning the restaurant licences of four establishments located in the food court at 222 Spadina Avenue. At the hearing before the Tribunal, the City sought to have the licences revoked because of public health violations. The Tribunal’s decisions given on March 17, April 20 and April 22, 2005 were to continue the licences subject to conditions. Since the decisions were rendered, two restaurants (Jumbo Chinese Combo and Golden Bull) are no longer in business. Their licences expired on May 5, 2006 and they were not renewed. Counsel for the Tribunal submits that the application for judicial review of the decisions regarding these two restaurants is, therefore, moot. Counsel for the City disagrees and asks for an order setting aside all four decisions and remitting the cases back to the Tribunal for consideration.

FACTUAL BACKGROUND:

2The Toronto Licensing Tribunal is responsible for conducting public hearings regarding applications for licences as set out in the City of Toronto Municipal Code, c. 545. The Municipal Act, 2001, S.O. 2001, c. 25, s. 151 provides that a municipal council has the discretion to revoke, suspend or place conditions on a business licence on grounds set out in the by-law. The City of Toronto delegated its adjudicative functions to the Tribunal to exercise the City’s powers and discretion over business licensing. The grounds for refusing the renewal of a licence are set out in the Municipal Code. The purposes of the Code are to protect the public from health hazards, educate the public, encourage restaurant owners to attain and maintain high standards and reduce inspection costs: see Ontario Restaurant Hotel & Motel Association v. City of Toronto (2005), 258 D.L.R. (4th) 447 at 450 (C.A.).

3Following a joint public health inspection on June 29, 2004 at four restaurants located at 222 Spadina Avenue, the licensees of 1081162 (operating as Chu Kwong Restaurant), Cantonese Stir Fry Restaurant, Jumbo Chinese Combo and Golden Bull Restaurant were given notice under the City of Toronto Municipal Code that they should appear before the Toronto Licensing Tribunal for a determination of whether their licences should be suspended, revoked or have conditions placed on them. Because the four licensees operated in the same food court and the facts involved were similar, hearings were held partly jointly and partly consecutively on March 17, April 20 and April 22, 2005. The restaurant operators appeared with interpreters and without counsel and the City was represented by counsel. There was agreement by all parties that the general evidence concerning the licensing scheme and relevant legislation would be applicable to all four hearings. The decisions were given as each case concluded.

THE DECISIONS UNDER REVIEW:

4The Tribunal found that there were numerous violations of the Health Protection and Promotion Act, R.S.O., 1990, c. H.7, which had resulted in convictions, closure orders and fines, but concluded that the licensees had made serious attempts to comply with the statutes and that the licences should not be revoked. Instead, they imposed a period of probation with a number of conditions that were essentially the same in all four cases, with slight modifications.

5The facts of the four related cases are not in dispute. At the hearing, it was not disputed that the licensees had breached various requirements under the Code and Regulations. The Tribunal heard evidence regarding various inspections and infractions ranging from significant to minor, mainly for operating with unsanitary conditions. The Tribunal also heard that there was a poor compliance rate with health and safety requirements and that there were convictions for various offences which led to closure orders. The Tribunal was empowered to renew, suspend, revoke or impose conditions on the licences. The Tribunal decided to impose conditions.

THE STANDARD OF REVIEW:

6Counsel for the City concedes that the applicable standard of review in these cases is patent unreasonableness. Considering the four contextual factors and applying the pragmatic and functional approach, we agree that is the appropriate standard: see Dr. Q. v. College of Physicians and Surgeons of British Columbia, 2003 SCC 19, [2003] S.C.J. No. 18. This court should only intervene where the decision is “clearly irrational” or “evidently not in accordance with reason”: see Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] 1 S.C.R. 247.

7The City submits the evidence demonstrated that the licensees had not carried on their business according to law and had endangered public health. There was no evidence to the contrary. The Tribunal focused on the livelihood of the licensees and failed to appreciate the test under the Municipal Code which gives jurisdiction to the Tribunal to revoke a licence on either past conduct alone or on reasonable belief that the past conduct is indicative of future conduct. The City says that the decisions were patently unreasonable, since the conclusions reached were not based upon the evidence.

8We agree with counsel for the Tribunal that the Tribunal considered the evidence and circumstances of each case, including past breaches and subsequent steps the licensees took to address problems and comply with the requirements. The decisions were supported by the evidence. The Tribunal was empowered to impose one of the sanctions set out in section 545(6), which it did. Applying the standard of patent unreasonableness, there is no reason to intervene.

9The more relevant issue is whether there was a denial of procedural fairness during the conduct of the hearing and compliance with the rules of natural justice. If the issue is one of procedural fairness, it is not necessary to engage in an analysis of the standard of review: see Gismondi v. Ontario (Human Rights Commission), [2003] O.J. No. 419 (Div. Ct.); London (City) v. Ayerswood Development Corp., [2002] O.J. No. 4859 (C.A.); Kalin v. Ontario College of Teachers (2005), 75 O.R. (3d) 523 (Div. Ct.).

10Counsel for the City took the position that there was a breach of natural justice in that the Tribunal erred in the application of the proper legal test when considering the evidence at the hearing, failed to provide meaningful reasons in the decisions, fettered its discretion, ignored the evidence and erred in law by not maintaining impartiality as a decision maker. Counsel argues that, as a result of the failure to provide due process, the cases should be remitted to the Tribunal for a new hearing.

11The licensees did not attend the hearing before us. The Tribunal, however, appeared represented by counsel who argued that the decisions were within the Tribunal’s jurisdiction and consistent with the Code and that the hearings were conducted in a fair and efficient manner.

THE RULES OF NATURAL JUSTICE:

12While the Tribunal is entitled to control its own procedure, which need not be technical or formal, it must act within the principles of natural justice and fairness: see Salem v. Metropolitan Licensing Commission (1993), 63 O.A.C. 198 (Ont. Div. Ct.). The City raises the following issues and argues they demonstrate a lack of procedural fairness.

13The first issue raised by the City is whether the Tribunal breached the rules of natural justice by not understanding its own jurisdiction as is discussed in Salem v. Metropolitan Licensing Commission, supra. Counsel for the City submits that the Tribunal did not understand its role, namely, to consider liability and then to receive submissions and determine disposition or penalty. In the case of the licence for Chu Kwong Restaurant, counsel says she was denied the opportunity to make submissions about penalty, namely, revocation of the licence. She says that the Chair misunderstood the Tribunal’s mandate and procedure and did not understand its task, which was to decide whether the licensee’s conduct was deserving of revocation.

14We have reviewed the transcript of proceedings and we are satisfied that the Tribunal determined the matter of liability, which was not contested, and then addressed the main issue in the cases which was the question of penalty. While the proceeding may not have been bifurcated, the Tribunal did seek submissions on the nature of conditions that might be imposed given the violations. If counsel for the City took strong issue with the procedure and believed she had been denied the opportunity to address the question of revocation, she should have reiterated her position which she did not do. She also concedes the Tribunal did receive submissions from her on the issue of revocation in the other three cases.

15The transcript at pages 133 to 138 contains the City’s submissions in the Chu Kwong case. While nominally on the liability issue, these submissions in essence “make the pitch” for revocation. They go over in detail the evidence as to the filthy conditions found by the inspector. While the Tribunal would have done better to have called for specific submissions as to the revocation, it did call for submissions as to the conditions. In the course of addressing the conditions, counsel for the City said that the City recognized that this licensee has cleaned up its act, noting that two recent inspections were good. In the particular circumstances here, we see no substantial wrong or miscarriage of justice and, accordingly, a new hearing should not be ordered: see Courts of Justice Act, R.S.O. 1990, c. 43, section 134(6).

16The second issue relates to an alleged failure to provide reasons, the consequences of which can be a breach of natural justice: see Kalin v. Ontario College of Teachers, supra. In their decisions, the Tribunal made reference to the evidence regarding violations of the Health Protection and Promotion Act and its regulations. However, the City argues that the Tribunal did not indicate how the public interest did not demand revocation of the licence and how it reached its decision. We find the Tribunal provided sufficient reasons by outlining the position of the City, referring to key evidence, describing the factor of balancing the public interest with the right of the licensee to carry on his livelihood, referring to the available remedies and outlining the remedy the Tribunal was selecting by listing the conditions to be imposed. While there was little discussion about liability, that aspect was not contested. It was not necessary to outline the infractions in great detail. The real issue in these cases was the appropriate remedy. It is apparent, in our view, how the Tribunal reached the decision not to revoke the licence and impose conditions. We do not accept the City’s argument that there were no reasons given for the decision to continue the licence with conditions.

17The City submits the Tribunal failed to consider the applications on their individual merits and pre-judged the case. The Tribunal provided almost identical decisions on each of the four cases before it. We note that all parties agreed with the procedure followed, which was to hear the four cases simultaneously, in part, and one following the other, in part. It was agreed that some testimony would apply to all four cases rather than have to be repeated four times. The parties and the Tribunal acknowledged that the four cases were related in that they involved similar premises in the same location, they were inspected at the same time in June 2004 which led to certain orders and consequences for infractions of health and safety matters, the facts were somewhat similar and there was a similar history of admitted past breaches with noted improvements and various activities during the period following. The four licensees were each notified to attend a hearing to determine whether their licences should be revoked and faced the same available sanctions with the same policy considerations under the Code. Counsel for the City requested that the Tribunal hear argument on the first case upon its conclusion, rather than waiting until all four hearings were concluded. The Tribunal distributed to the parties on the second day the decision it reached for the first case and commented that the decision might be a “guidepost” if there was any thought of resolving the other cases. He urged the parties to seek to resolve the other cases.

18That the Tribunal asked the parties at the conclusion of the first case to consider whether there was a possibility of resolving some of these cases, thus encouraging settlement, does not suggest any pre-judging by the Tribunal. It was expeditious and efficient to handle the cases in a co-ordinated and consistent manner. That the Tribunal decided to continue the licences in each case and impose similar conditions does not suggest the Tribunal did not consider the cases on their individual merits.

19The City says there was interference throughout the hearings by the Tribunal. Counsel argues that, on a number of occasions, the Tribunal asked questions as if it were a party to the proceeding, thus suggesting that the Tribunal was descending into the arena. In reviewing the transcripts, it appears the Tribunal was asking questions because the licensees were not represented by counsel and the licensees had difficulty understanding the English language. There was an educational opportunity for the licensees in having the Tribunal members seek clarification from the City’s witnesses. That the Tribunal asked a number of questions does not offend the rules of natural justice. Administrative hearings are intended to be less formal and the tribunal is entitled to take an active role in inquiring about matters in order to clarify information so that it can make an informed decision. The manner of questioning by the Tribunal was not extreme or excessive, did not interfere with the City’s ability to present its case and did not give rise to a reasonable apprehension of bias. The suggestion that the Tribunal “stepped into the arena” is unfounded. It cannot be said there was, “intervention amounting to interference in the conduct of a trial” which destroys the image of judicial impartiality and deprives the court of jurisdiction: see Majcenic v. Natale, [1968] 1 O.R. 189-205 as cited in Lennox v. Arbor Memorial Services Inc. (2001), 56 O.R. (3d) 795 (C.A.).

CONCLUSIONS:

20For the reasons outlined above, the application for judicial review brought by the City of Toronto of the decisions of the Toronto Licensing Tribunal is dismissed. The parties may file brief written submissions on the issue of costs, if costs are demanded.

LANE J.

CARNWATH J.

HIMEL J.

Released:

COURT FILE NO.: 318/05, 319/05, 320/05, 321/05

DATE: 20070328

ONTARIO

SUPERIOR COURT OF JUSTICE

LANE, CARNWATH AND HIMEL JJ.

B E T W E E N:

CITY OF TORONTO

• And -

SI NAM NG AND WAI CHAN, Operating as CANTONESE STIR FRY RESTAURANT and the TORONTO LICENSING TRIBUNAL;

1081162 ONTARIO LTD a/a CHU KWONG RESTAURANT and the

TORONTO LICENSING TRIBUNAL;

TUYET MAI HUA, Operating as GOLDEN BULL RESTAURANT and the TORONTO LICENSING TRIBUNAL;

WING SING KWAN, Operating as JUMBO CHINESE COMBO (a.k.a. JAN BAO DELIGHT) and the TORONTO LICENSING TRIBUNAL