Editor’s Note: Addendum released June 29, 2007 Original judgment has been corrected, with text of addendum appended.
CITATION: The Adult Entertainment Association of Canada v. Ottawa (City), 2007 ONCA 389
DATE: 20070524
DOCKET: C44218
COURT OF APPEAL FOR ONTARIO
GOUDGE, BLAIR AND LAFORME JJ.A.
B E T W E E N :
THE ADULT ENTERTAINMENT ASSOCIATION OF CANADA, THE NUDEN, THE BAREFAX INC., BARBARELLA DIAMONDS, SILVER DOLLAR, OASIS SHOW BAR, THE PLAYMATE, POLAR BARE CLUB, JOSEPH BENTIVOGLIO, DOUG PETTIT, PIERRE GROULX, MICHAEL NORWOOD, ROBERT AUTUMN, JACQUES CAMPEAU, PATRICK CAMPEAU, LARRY LEPINE, MICHELENE DECLARE, DAWN SANDEY AND JILL MANSFIELD[^1]
Morris Manning Q.C., for the applicants, appellants
Appellants
- and -
THE CORPORATION OF THE CITY OF OTTAWA
Michael Rankin and Martin Thompson, for the respondent, respondent
Respondent
Heard: January 18, 2007
On appeal from the judgment of Justice Charles T. Hackland of the Superior Court of Justice, dated August 30, 2005, with reasons reported at 14 M.P.L.R. (4th) 17.
R.A. BLAIR J.A.:
[1] Most of the appellants are owners or operators of adult entertainment parlours in the City of Ottawa. Some are performers at such establishments. They all seek to set aside the order of Justice Charles T. Hackland dismissing their application to quash a City by-law restricting the operations of their establishments. At the root of their complaints are provisions prohibiting touching between dancers and customers and, more particularly, requiring that all live entertainment or services be performed in open designated entertainment areas. This has significant consequences for the pursuit known as “lapdancing” which is said to be very important for the profitability of their entertainment parlours.
[2] For the reasons that follow, I would dismiss the appeal.
FACTUAL FRAMEWORK
[3] Following the creation of the new amalgamated City of Ottawa in January 2001, the City had to harmonize the by-laws it inherited from the former municipalities of Gloucester, Nepean, Kanata, Osgoode and Vanier with its own. Amongst the enterprises affected by this exercise were adult entertainment parlours.[^2]
[4] In the course of preparing a new draft licensing by-law respecting such establishments, City staff consulted with interested stakeholders – including the appellants – and studied best practices in other municipalities such as Toronto, Mississauga and Windsor. On August 25, 2004, City of Ottawa By-law 2004-353 respecting the regulating, licensing and governing of adult entertainment parlours (the “AEP By-law”) was enacted. It became effective on November 1, 2004.
[5] The stated purpose of the AEP By-law is captured in the preamble, which states:
AND WHEREAS City Council at its meeting of June 23rd, 2004 determined that it is appropriate to license adult entertainment owners and adult entertainment operators for the purposes of health and safety and consumer protection in order to provide a safe environment for patrons and employees[.]
[6] Under the AEP By-law, all adult entertainment parlours are required to establish designated entertainment areas where all live entertainment or services are to be performed so as to improve the security for performers and patrons by ensuring that all entertainment takes place out in the open. Touching is prohibited. Adult entertainment owners and operators are not to permit performers “providing live entertainment or services designed to appeal to exotic or sexual appetites or inclinations to touch or be touched by or have physical contact with any person in any manner whatsoever involving any part of that person’s body”.
[7] The designated entertainment area is a new provision to Ottawa. Although the old City by-law prohibited touching between dancers and customers, the prohibition was rarely enforced because lap dancing was carried out in private rooms or curtained areas – referred to as “VIP” or “champagne” rooms. This allowed owners and managers of the adult entertainment parlours to take the position that they did not knowingly permit lap dancing or whatever touching may have occurred. The institution of the designated entertainment area – or, to put it another way, the elimination of the VIP and champagne rooms – is the central practical effect of the AEP By-law from the perspective of the appellants. Its negative impact on their businesses is said to be considerable.
[8] In January 2005, the appellants moved to quash the AEP By-law and for other related relief. On August 30, 2005, Hackland J. dismissed their application in its entirety.
ISSUES
[9] The appellants raise a host of grounds by way of appeal. They may be summarized as follows:
Whether the City has the power to enact the AEP By-law;
Whether – if it does – the City failed to exercise its powers in a manner that complied with the enabling provisions of the Municipal Act, 2001, S.O. 2001, c. 25, in particular ss. 150(2) [exercising licensing powers for an improper purpose], 150(3) [lack of explanation], and 150(4) [lack of notice];
Whether there was an evidentiary basis upon which City Council could have concluded that health and safety or consumer protection matters were of any real concern;
Whether the AEP Bylaw is ultra vires its enabling legislation because:
(a) it constitutes an unlawful delegation of legislative authority;
(b) it permits unlawful discrimination against members of the same class (license holders);
(c) it permits unlawful discrimination between operators and dancers;
(d) it allows for arbitrary and discriminatory application; and
(e) it restricts the use of land under the guise of licensing.
Whether the AEP Bylaw is void for vagueness;
Whether ss. 99 (advertising devices) and 151(3) of the Municipal Act, 2001 (power of entry) are void for vagueness;
Whether the application judge erred in failing to find that the AEP Bylaw violates ss. 2(b), 7 and 8 of the Canadian Charter of Rights and Freedoms;
Whether the AEP Bylaw is colourable municipal legislation in that it attempts to apply to matters covered by the Liquor License Act, R.S.O. 1990, c. L.19, and the Health Protection and Promotion Act, R.S.O. 1990, C. H.7; and finally,
Whether the application judge erred in awarding costs to the City.
[10] I shall deal with these issues in the analysis that follows, but not necessarily in the foregoing order or separately and individually. A number of them overlap.
ANALYSIS
1. The City Has the Power to Enact the AEP By-law
[11] Although the appellants submit that the City did not have the power to pass the AEP By-law at all, their primary submission is that the City failed to comply with its obligations under the Municipal Act, 2001 (“the Act”) in enacting the by-law and thus lacked the jurisdiction to do so.
[12] There is no question the City had the authority to enact a by-law licensing, regulating and governing the operation of adult entertainment parlours. The authority was derived from ss. 150 (general licensing powers) and 151 (dealing specifically with adult entertainment parlours) of the Act as it then stood. The text of these sections is set out in full in Appendix I to these reasons. For the purposes of this point, the relevant provisions are the following:
- (1) Subject to the Theatres Act and the Retail Business Holidays Act, a local municipality may license, regulate and govern any business wholly or partly carried on within the municipality even if the business is being carried on from a location outside the municipality.
Purposes
(2) Except as otherwise provided, a municipality may only exercise its licensing powers under this section, including imposing conditions, for one or more of the following purposes:
Health and safety.
Nuisance control.
Consumer protection.
(1) A by-law under section 150 that licenses, regulates and governs adult entertainment establishments may,
(a) despite subsection 150 (12), define the area of the municipality in which adult entertainment establishments may or may not operate and limit the number of licences granted in any defined area in which they are permitted;
(b) regulate and prohibit the placement, construction, size, nature and character of signs, advertising, and advertising devices, including any printed matter, oral or other communication or thing used to promote adult entertainment establishments; and
(c) prohibit any person carrying on or engaged in an adult entertainment establishment business for which a licence is required from permitting any person under the age of 18 years to enter or remain in the adult entertainment establishment or any part of it.
Premises
(2) Any premises or any part of them is an adult entertainment establishment if, in the pursuance of a business,
(a) goods, entertainment or services that are designed to appeal to erotic or sexual appetites or inclinations are provided in the premises or part of the premises; or
(b) body-rubs, including the kneading, manipulating, rubbing, massaging, touching or stimulating by any means of a person's body, are performed, offered or solicited in the premises or part of the premises, but does not include premises or part of them where body-rubs performed, offered or solicited are for the purpose of medical or therapeutic treatment and are performed or offered by persons otherwise duly qualified, licensed or registered to do so under the laws of the Province of Ontario.
2. Did the City Engage in a Proper Exercise of its Regulatory Power?
No Lack of Notice (s. 150(4))
[13] The appellants contend that the City failed to give them proper notice as required by s. 150(4) of the Act. While there was a consultative meeting with industry personnel on June 1, 2004, and while a public meeting was held on June 10, 2004, and notice of that meeting was sent out, they say that the notice made no reference to health and safety or consumer protection concerns and that the overall consultation with industry stakeholders was insufficient. In addition, they complain that the City improperly consulted with the Dancers’ Equal Rights Association (“D.E.R.A.”), a group they state was small and not representative of dancers in their establishments. In short, the appellants complain that there were no meaningful good-faith discussions with industry stakeholders.
[14] The application judge rejected this argument and found that the City had complied with its obligations under subsection 150(4). The record amply supports this finding.
[15] Amongst other things, the evidence demonstrates that on May 21 and 28, 2004, notices were placed in The Ottawa Citizen, The Ottawa Sun, and Le Droit advising of the proposed regulations and giving notice of a public meeting to be held on June 10. The Notice of Public Meeting summarized the “regulations and responsibilities” in the proposed By-law, mentioning specifically that “…the owner and operator shall not allow or permit ‘touching’ …” and that entertainment would be restricted “to approved ‘Designated Entertainment Areas’ …”. The Notice was mailed, faxed or e-mailed to all adult entertainment licensees.
[16] On June 1, 2004, City by-law officials met with adult entertainment industry representatives and their legal counsel to discuss the new provisions and processes, and a further meeting with other stakeholders took place on June 7. At the public consultation meeting held on June 10, two of the appellant club owners were in attendance and offered comments; dancers were also present. Indeed, as a result of objections from the owners and from D.E.R.A. and the dancers, the proposed by-law was amended to remove a requirement that dancers be licensed (the owners said they kept a record of the names and addresses of all employees and would be willing to disclose the record to police, thus avoiding the need for such licensing). D.E.R.A. had held an open house for dancers in early May and circulated relevant information. Finally, representatives of the appellants and their legal counsel were present at the council meeting on August 25, 2004, when the AEP By-law was passed. In spite of the foregoing, none of the appellants took the opportunity to provide any written information or make any written submissions to the City during the draft by-law process.
[17] In the end, the application judge made a clear finding that “the [appellants] had a fair and reasonable opportunity to appreciate the terms of the proposed By-law and to have appropriate input”, and that “[t]he requirements of section 150(4) of the Municipal Act were fully met”. There is no basis for interfering with this finding.
The City Did Not Fail to Comply with ss. 150(2) (Licensing Purposes) and 150(3) (Explanation) of the Municipal Act, 2001
[18] At the relevant time, ss. 150(2) and 150(3)of the Act provided that:
(2) Except as otherwise provided, a municipality may only exercise its licensing powers under this section, including imposing conditions, for one or more of the following purposes:
Health and safety.
Nuisance control.
Consumer protection.
(3) A by-law licensing or imposing any condition on any business or class of business passed after this section comes into force shall include an explanation as to the reason why the municipality is licensing it or imposing the conditions and how that reason relates to the purposes under subsection (2).
[19] Although the preamble to the AEP By-law states that it is being enacted “for the purposes of health and safety and consumer protection in order to provide a safe environment for patrons and employees”, the appellants contend that this statement is simply window dressing and that the primary purpose of the by-law is to give effect to “a desire to re-engineer the entire Adult Entertainment industry in the new City of Ottawa, thereby gaining control of those who work in it and effectively drive them out of business”.[^3] Several themes from the appellants’ case emerge from this contention.
[20] First, the appellants submit that the AEP By-law fails to adequately explain the reasons why the municipality is licensing and imposing conditions upon the adult entertainment industry and how those reasons relate to the subsection 150(2) purposes. This submission is without merit. As the preamble makes clear, the City’s reason for licensing adult entertainment owners and operators is to promote health and safety and consumer protection in order to provide a safe environment for patrons and employees. The link with subsection 150(2) is obvious: a municipality may license business for purposes of health and safety and consumer protection. A reading of the AEP By-law as a whole confirms that its provisions respond to these purposes. Moreover, the application judge specifically rejected the argument that the City acted in bad faith or for an ulterior purpose, finding there was “simply no evidence to sustain the argument that there was an ulterior motive in passing the AEP By-law”.
[21] Secondly, the appellants argue that the AEP By-law was enacted for a purpose other than that for which it purported to be enacted, and therefore that it is ultra vires the powers of the municipality. This submission is also met by the application judge’s finding that the City did not act in bad faith or for an ulterior purpose, a finding that cannot be interfered with on this record. In addition, this Court has already determined that a by-law with essentially the same provisions was a valid exercise of municipal regulatory authority: see Ontario Adult Entertainment Bar Assn. v. Metropolitan Toronto (Municipality) (1995), 1995 10668 (ON SC), 26 O.R. (3d) 257 (Div. Ct.); affirmed as Ontario Adult Entertainment Bar Assn. v. Toronto (Metropolitan) (1997), 1997 14486 (ON CA), 35 O.R. (3d) 161 (C.A.). I shall refer to this decision as “the Toronto AEP By-law case” in these reasons, and return to this latter point later when dealing with the colourability issue.
[22] Aligned with the foregoing argument is a third submission, namely, that the AEP By-law seeks to prohibit the appellants’ businesses rather than to regulate them. I would not give effect to this contention either. A similar contention, in relation to a similar by-law, has already been rejected in the Toronto AEP By-law case. As the Divisional Court pointed out in that decision (at 268), “[r]egulation usually involves some form of prohibition”, but “[w]hat the municipality may not do – either directly or indirectly – is to prohibit adult entertainment parlours as such.” The AEP By-law does not do that. It prohibits all touching in relation to the provision of “services”, i.e., during exotic dancing, and requires that all live entertainment and services be provided in unobstructed designated entertainment areas. However, physical contact between performers and clients in a private setting is not essential to the operation of an adult entertainment parlour. The appellants are free to carry on their core activities of providing entertainment through stage shows, table dancing, and the sale of food and alcoholic beverages. Indeed, the nine adult entertainment parlours that were parties to this proceeding were all preserved under the AEP By-law.
[23] As the Divisional Court observed in the Toronto AEP By-law case, at 268:
Physical contact is not an essential element in the operation of an adult entertainment parlour. Other than prohibiting touching and physical contact,[^4] the impugned by-law does not put restrictions on what an attendant may do while performing services. … In our opinion the impugned by-law does nothing more than regulate the manner in which activities and other services may be provided in an adult entertainment parlour. The by-law cannot be struck down on the ground that it prohibits rather than regulates.
[24] The Court of Appeal agreed (at 170-72). The same comments apply to the AEP By-law.
There was a Factual Foundation for Enacting the By-law
[25] Finally, the appellants contend that the AEP By-law was enacted without a proper factual foundation to support the health and safety and consumer protection rationales set out in subsection 150(2). They say there was “a lack of reliable evidence” regarding any consultation between the City by-law officials and the City Department of Health, that the Department of Health had done no specific study on the adult entertainment industry in Ottawa, and that there was expert evidence to the effect that lap dancing did not result in the transmission of infectious diseases. The City had received no complaints from dancers that they feared for their health or safety and there are few reported incidents of assaults on dancers, although the police believe that such a risk exists.
[26] Again, however, the application judge made findings against the appellants on this issue. He considered the foregoing evidence, but noted that there were other factors to be considered as well. For instance, the City Department of Health had been concerned for some years about health risks to dancers, and had promoted a vaccination program and distributed a “risky business” flyer in 2000. It had collected reports and studies suggesting that lap dancing posed a risk to those involved. The City’s public health nurse had been involved in the consultation process respecting the drafting of the AEP By-law, and the City had reports from police, dancers and by-law officers expressing concerns relating to public health and safety in connection with lap dancing. City Council had an extensive Committee Report before it – addressing all of these health and safety and consumer protection concerns – when it enacted the AEP By-law and it “considered the reasonableness of these concerns and voted unanimously in favour of the ‘designated area’ requirement and the new AEP By-law as a whole.”
[27] The application judge ended this portion of his reasons with the following finding:
In conclusion on this issue, while the evidence of health risk was not conclusively established and is somewhat “impressionistic”, the concerns underlying the “no touch” and “designated entertainment area” provisions of the AEP By-law are reasonable and genuine as are the safety concerns in relation to the dancers. Ottawa City council is entitled to deference in their decision that this By-law was necessary and warranted their approval. I therefore find as a fact that in passing the AEP By-law the City acted reasonably within its legislative competence, for valid municipal purposes.
[28] This finding was amply supported on the record and is justified in law.
[29] In the Toronto AEP By-law case this Court concurred with the Divisional Court (at 171) in recognizing:
that there is no requirement for [Council] to have clear and cogent evidence before it passes a by-law. What is necessary is that the municipality acted reasonably within its legislative competence for valid municipal reasons. There is evidence, although somewhat impressionistic, that lap dancing gives rise to health and safety concerns. The impugned by-law addresses such concerns.
[30] The same may be said in this case. Moreover, the law is now clear that courts are to afford considerable deference to municipalities in the exercise of their valid regulatory powers on behalf of the citizens who elect them: see Shell Canada Products Ltd. v. Vancouver (City), 1994 115 (SCC), [1994] 1 S.C.R. 231 at 247-48 (per McLachlin J., dissenting); 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town), 2001 SCC 40, [2001] 2 S.C.R. 241. I agree with the sentiments of the Divisional Court in the Toronto AEP By-law case (at 270) that “[i]t is not for the court to measure [the] risks” to health and safety and consumer protection based on the information the municipality has – “that was for the council”.
3. The AEP By-law is not Ultra Vires its Enabling Legislation
[31] I turn now to the appellants’ position that the AEP By-law is ultra vires its enabling legislation because (a) it constitutes an unlawful delegation of legislative authority, (b) it permits unlawful discrimination against members of the same class (license holders), (c) it permits unlawful discrimination between operators and dancers, (d) it allows for arbitrary and discriminatory application, and (e) it restricts the use of land under the guise of licensing. None of these submissions can prevail, in my opinion.
The AEP By-law does not Constitute an Unlawful Delegation of Legislative Authority or Permit Arbitrary and Discriminatory Application
[32] The appellants say that section 4(1)(e) of Schedule 11 of the AEP By-law constitutes a wholesale delegation of its regulation-making authority to the Chief of Police and the Chief License Inspector, and is therefore ultra vires. Section 4(1)(e) states:
No license or renewal of license shall be issued to an owner of an adult entertainment parlour unless:
(e) a detailed floor plan, drawn to scale, of the adult entertainment parlour has been approved by the Chief License Inspector and the Chief of Police and the details on such floor plan shall include but are not limited to the following:
(i) the designated entertainment area; and
(ii) the location of seating areas, offices, cloak rooms, disc jockey area, kitchen facilities, bar area, dressing rooms, washrooms, storage areas and exits.
[33] Mr. Manning argues that this provision constitutes an impermissible sub-delegation of municipal legislative powers because it allows law enforcement officials to make laws on a case-by-case basis, subject to no standards prescribed by the City, and effectively defers lawmaking until such time as the delegate decides to exercise the lawmaking power in question.
[34] I would not give effect to this submission. The AEP By-law does not entail an impermissible delegation by the City of its legislative authority in relation to the licensing of adult entertainment parlours. Rather, it provides for a permissible delegation of administrative and enforcement detail, in my view. Nor is the requirement in s. 4(1)(e) of Schedule 11 for the approval of a detailed floor plan a standard-less exercise, as the appellants contend.
[35] The key to unravelling the appellants’ submission in this regard is found in the definitions of “designated entertainment area” and “unobstructed” in s. 1 of the AEP By-law:
“designated entertainment area” means the area, approved by the Chief of Police and the Chief License Inspector, where live entertainment or services designed to appeal to erotic or sexual appetites or inclinations may be provided, such area to offer a clear and unobstructed view to entrances, disc jockey area, bar and other public areas[.]
“unobstructed” means without obstruction by walls, structures, curtains or any other screen or enclosure. [Emphasis added.]
[36] When the requirement for approval of a detailed floor plan is considered in the context of those provisions it is clear that the Chief License Inspector and the Chief of Police do not have an unbridled discretion to approve or not to approve the issuance of a license to an adult entertainment parlour owner at their whim on a case-by-case basis and without regard to any standards. The approval or non-approval of the floor plan will be measured against the benchmark criteria of where a designated entertainment area is to be situated – namely, in a location that offers “a clear and unobstructed view to entrances, disc jockey area, bar and other public areas”. These criteria mesh with the floor plan details called for in s. 4(1) of Schedule 11. In substance, what the By-law gives to the Chief License Inspector and the Chief of Police is simply the ability to ensure site line compliance with the objectives of the designated entertainment area concept. As the report that was before council when the AEP By-law was enacted proposed:
It is also recommended that the applicant be required to provide a detailed floor plan depicting the layout of the Adult Entertainment Parlour. If approved, this recommendation will enable Police and By-law Services to recommend that modifications be made to eliminate obstructed areas that might encourage illicit activities. [Emphasis added.]
[37] Cases relied upon by the appellants, such as R. v. Sandler, 1971 478 (ON SC), [1971] 3 O.R. 614 (C.A.); Forst v. Toronto (City) (1923), 54 O.L.R. 256 (C.A.); and Re Clements & Toronto, 1959 145 (ON SC), [1959] O.R. 280 (H.C.J.); do not assist them. They are all cases in which a municipality delegated its complete regulatory power to an official in one fashion or another. In Sandler, it was the delegation of a power to make “such other regulations for preventing fires … as the council may deem necessary” to the fire chief “to make such orders for the installation, repair or replacement of fire protection equipment as he deems necessary” (at 618). [Emphasis added.] Forst involved the creation by the city of “a municipal cadi” (at 279) in the form of the city architect, who was given carte blanche authority to refuse or consent to the removal of any building in the city. In Re Clements the municipality delegated to the commissioner of parks its “complete power to regulate parking in the city parks, not in an administrative way but in determining whether such parking may be permitted there at all or not and when” (at 284). There is no such broad delegation here.
[38] Section 4(1)(e) simply gives to the Chief License Inspector and the Chief of Police – those officials primarily responsible for the administration and enforcement of the adult entertainment parlour by-law – the ability to ensure from the license applicant’s floor plan that the physical facilities will comply with the by-law’s intent that “live entertainment or services appealing to or designed to appeal to erotic or sexual appetites or inclinations”[^5] take place in the open.
The AEP By-law is not Discriminatory
[39] There is no merit in the argument that the AEP By-law is ultra vires because it discriminates between members of the same class, that is, as between license holders and as between operators and dancers.
[40] A municipality is permitted to discriminate or differentiate between different classes of persons or businesses: Municipal Act, 2001, s. 10. However, it may not do so as between members of the same class within the class: 679619 Ontario Ltd. (c.o.b. Silvers Lounge) v. Windsor (City), 2007 ONCA 7, leave to appeal to S.C.C. requested.
[41] The first argument – that there is discrimination as between license holders who are members of the same class – is premised on the submission, rejected above, that the AEP By-law impermissibly delegates a discretion to the Chief License Inspector and the Chief of Police respecting the approval of floor plans and the “designated entertainment area”. For the reasons articulated earlier, the By-law does not do so, and this argument therefore cannot succeed.
[42] The appellants submit further, however, that the by-law permits discrimination as between adult entertainment parlour operators (who have to be licensed) and performers (who do not). As noted earlier, the licensing of performers is a proposal that was dropped during the consultation phase at the request of the dancers and at least partially on the representation of various owners that licensing performers was unnecessary because they kept records of the names and addresses of all performers and would make them available to enforcement officials on request, thus precluding the need to license performers. This is some indication that the different treatment of operators and performers was not considered significant by the appellants at the time.
[43] In any event, this argument must fail as well, in my opinion, because operators and performers do not fall within the same class. They do not “share membership in [a] sub-group [of employees within a particular trade or occupation] based on working conditions or an employment-related characteristic”: Silvers Lounge, supra at para. 33. Operators perform managerial functions. Indeed, the AEP By-law requires that either a licensed owner or licensed operator be on the premises at all time when they are open. Performers are employees only – or, perhaps, independent contractors – and their role in the operation of the adult entertainment parlour is quite different from that of a licensed operator.
The AEP By-law does not Restrict the Use of Land under the Guise of Licensing
[44] Section 8 of Schedule 11 of the AEP By-law restricts the location of adult entertainment parlours in Ottawa to the appellants’ existing nine locations and to certain other designated areas of the City. The appellants say this provision amounts to an indirect and ultra vires attempt to introduce a zoning scheme restricting the use of land, under the guise of a licensing scheme, in order to put them out of business.
[45] The submission is utterly without merit since the Act expressly provides a municipality with authority to “define the area of the municipality in which adult entertainment establishments may or may not operate and limit the number of licences granted in any defined area in which they are permitted”: Municipal Act, 2001, s. 151(1)(a). In addition, as noted, rather than attempting to put the appellants out of business, the AEP By-law explicitly preserves all existing adult entertainment parlours in the City.
4. The AEP By-law is not Void for Vagueness
[46] The argument that the AEP By-law is void for vagueness is founded on arguments that were all rejected by the application judge and that have been rejected as well in these reasons. The appellants submit that the by-law is too vague (a) because there is a potential for arbitrariness and discrimination with respect to enforcement decisions and in the approval process for the designated entertainment areas, (b) because the “no touching” provision is overly broad and open to abuse, and (c) because the by-law provisions are prohibitory rather than regulatory and are designed to put the appellants out of business. For the reasons outlined earlier in these reasons, there is no merit in these submissions. Similar submissions have already been rejected by this Court in the Toronto AEP By-law case.
5. Reasonableness
[47] In Ontario a by-law passed in good faith may not be quashed or reviewed “because of the unreasonableness or supposed unreasonableness of the by-law”: Municipal Act, 2001, s. 272. Mr. Manning submits that this provision in the Act is unconstitutional on the basis of a fundamental unwritten constitutional principle that no legislative body – including a municipality when enacting a by-law – may pass a law that is unreasonable.
[48] There is both a legal and a factual impediment to this argument. First, the legal impediment. Although the notice of appeal and facta were served on the Attorney General for Canada and the Attorney General for Ontario, no notice of constitutional question with respect to the constitutionality of s. 272 was served as required (this was pointed out to the appellants in correspondence from the Attorney General for Ontario). Accordingly, the argument is not open to the appellants: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 109.
[49] Secondly, and in any event, the application judge specifically found on the record before him that the City had acted reasonably in enacting the AEP By-law. There is no basis for interfering with that finding.
[50] It follows, therefore, that even if a standard of review of patent unreasonableness were applied, as suggested in Montréal (City) v. 2952-1366 Québec Inc., 2005 SCC 62, [2005] 3 S.C.R. 141 at para. 41 – the case relied upon by the appellants – the argument would fail on the facts of this case.
[51]
[52]
6. Vagueness in Relation to ss. 99 (advertising devices) and 151(3) (power of entry) of the Municipal Act, 2001
[53] The appellants specifically target ss. 99 and 151(3) of the Municipal Act, 2001 for vagueness. The relevant provisions state:
The following rules apply to a by-law of a municipality respecting advertising devices, including signs:
The by-law may prohibit and regulate the message, content and nature of signs, advertising and advertising devices, including any printed matter, oral or other communication or thing, promoting adult entertainment establishments, but nothing in this paragraph limits the power to pass by-laws with respect to any other business or person.
151(3) A municipality may, at any time of the day or night, enter any adult entertainment establishment licensed, regulated or governed by a by-law under section 150 to determine whether the by-law is being complied with and, for this purpose, may make such examinations, investigations and inquiries as are necessary.
[54] Mr. Manning submits these statutory provisions are void for vagueness (a) because they give the City the authority to tailor its by-laws to its own whims, contrary to principles of fundamental justice, and (b) because they provide no limitation on law enforcement discretion. They therefore contravene the rule of law.
[55] A law is too vague where it “does not provide an adequate basis for legal debate” and “does not sufficiently delineate any area of risk, and thus can provide neither fair notice to the citizen nor a limitation of enforcement discretion”: R. v. Nova Scotia Pharmaceutical Society, 1992 72 (SCC), [1992] 2 S.C.R. 606 at 639. Language is not an exact tool, however, and a law cannot be expected to predict the legal consequences of all possible courses of conduct. As Gonthier J. noted in that case, “[w]hat becomes more problematic is not so much general terms conferring broad discretion, but terms failing to give direction as to how to exercise this discretion, so that this exercise may be controlled” (at 612). A law is unconstitutionally vague if it cannot, even with judicial interpretation, give meaningful standards of conduct. See also, Reference re ss. 193 and 195.1(1)(c) of the Criminal Code (Man.), 1990 105 (SCC), [1990] 1 S.C.R. 1123 at 1156.
[56] I see nothing in the language of either ss. 99.2 or 151(3) of the Act that renders either provision unconstitutionally vague in the foregoing sense.
[57] In addition, the vagueness argument based on the rule of law does not assist the appellants in this case. As the Supreme Court observed in British Columbia v. Imperial Tobacco Canada Ltd., 2005 SCC 49, [2005] 2 S.C.R. 473 at paras. 59 and 60:
[I]t is difficult to conceive of how the rule of law could be used as a basis for invalidating legislation such as the Act based on its content. That is because none of the principles that the rule of law embraces speak directly to the terms of legislation.
This does not mean that the rule of law as described by this Court has no normative force. As McLachlin C.J. stated in Babcock, at para. 54, “unwritten constitutional principles”, including the rule of law, “are capable of limiting government actions”. … But the government action constrained by the rule of law … is, by definition, usually that of the executive and judicial branches. Actions of the legislative branch are constrained too, but only in the sense that they must comply with legislated requirements as to manner and form (i.e., the procedures by which legislation is to be enacted, amended and repealed). [Emphasis added.]
[58] Accordingly, this ground of appeal must fail as well. In addition, in so far as it relates to the constitutionality of the impugned provisions, the argument must be rejected for lack of notice.
7. Whether the AEP By-law Violates ss. 2(b), 7 or 8 of the Charter
Section 2(b)
[59] The appellants contend that ss. 99.2 and 151(1)(b) of the Act, together with ss. 18 and 20 of Schedule 11 of the AEP By-law, contravene their right to freedom of expression under s. 2(b) of the Charter. I disagree.
[60] Sections 18 and 20 of Schedule 11 of the by-law state:
- No adult entertainment owner or adult entertainment operator shall place or permit to be placed any sign, or any other advertising device on any premises occupied by an adult entertainment parlour save and except a sign or other advertising device containing the words “Adult Entertainment Parlour” and the name under which the business is operated provided such name does not include any of the following words:
“nude”, “naked”, “topless”, “bottomless”, “sexy” or any other word or any pictures, symbol or representation having like meaning or implication.
- No adult entertainment owner or adult entertainment operator shall permit any adult entertainment performer providing live entertainment or services designed to appeal to erotic or sexual appetites or inclinations to touch or be touched by or have physical contact with any other person in any manner whatsoever involving any part of that person’s body.
[61] First, as the application judge noted, insofar as it relates to the “no touching” requirements of s. 20 of the by-law, the s. 2(b) argument has already been dismissed by this Court in the Toronto AEP By-law case, where the no touching provision was virtually identical to the provision here. In that case Finlayson J.A. was prepared to assume, without deciding – given the tendency of courts to take an expansive view in approaching the characterization of conduct as expression – that lap dancing constitutes a form of expression protected by s. 2(b), “even if only marginally so” (at 176). However, he concluded, as had the Divisional Court, that the impugned provision in the by-law was saved under s. 1 of the Charter as a justifiable limit of a Charter right. I would adopt the same analysis here.
[62] Nor am I persuaded that the restrictions in s. 18 of the AEP By-law with respect to the placing and contents of signs and advertising devices are unenforceable on Charter grounds. Nothing more needs to be said than to cite the careful and succinct reasons of the application judge in this regard, which I adopt:
Municipalities have general powers under section 99 and specific powers under section 151 of the Municipal Act, 2001, S.O. 2001, c. 25, to prohibit and regulate the message, content and nature of signs, advertising and advertising devices. The AEP By-law does not prohibit adult entertainment owners or operators from erecting signs or using other advertising devices on premises occupied by an adult entertainment parlour. The By-law permits owners and operators to inform potential customers of the activities of the establishment by the use of the words “adult entertainment parlour”. Prohibited is the use of words such as nude, naked, topless, bottomless, sexy or any other pictures or symbols having similar meaning.
As in the recent decision of the Ontario Court of Appeal in Ontario (Minister of Transportation) v. Miracle (2005), 2005 2305 (ON CA), 74 O.R. (3d) 161, the prohibition does not catch expression of opinion, but simply deals with a business advertisement. Even if it can be argued that section 151 of the Municipal Act may constitute or authorize a limit on freedom of expression, and thus infringe section 2(b) of the Charter, the provision can be saved pursuant to section 1 of the Charter in that recognizing community standards of tolerance as this By-law attempts to do, is a sufficiently important objective to justify limiting a Charter right. The signage restriction is rationally connected to that objective and impairs the right no more than is necessary to accomplish its objective and does not have a disproportionately severe effect on the adult entertainment parlour owners. Indeed, the report which was provided to City council prior to passage of the By-law, specifically attributes to one of the applicant club owners the representation that the restriction on signage is not objected to by the club owners. These provisions were a part of the previous Ottawa by-law, and had never been the subject of complaint.
[63] Contrary to the submission of the appellants, there was ample evidence before the application judge to support his conclusion on the s. 1 analysis. There was evidence from the Director of By-law Services for the City of Ottawa, Susan Jones, that limiting the content of adult entertainment parlour signs was in the public interest as the signs are in public places where children as well as adults will see them; that community tolerance in Ottawa is such that words like nude, naked, topless, bottomless, sexy and other words or pictures or symbols of like meaning are not considered an acceptable standard; and that the AEP By-law represents a rational attempt to strike an appropriate balance between the right of businesses to identify themselves and convey messages and respect for community standards of tolerance. This evidence buttresses both the pressing and substantial objective and rational connection criteria called for in R v. Oakes, 1986 46 (SCC), [1986] 1 S.C.R. 103, as part of the s. 1 analysis. The fact that there is no blanket prohibition against the display of signs and advertising devices – owners and operators can still put up signs stating their business as adult entertainment parlours – supports the minimal impairment and proportionality criteria, as does the fact that the signage requirements received no negative comments from the appellants during the consultation process.
[64] The appellants also impugn on s. 2(b) grounds the requirement of s. 24 of Schedule 11 of the by-law that notices be posted in various places in the adult entertainment establishments advising (a) that physical contact is prohibited, and (b) that sexually transmitted infections can be transmitted through unprotected physical contact. They say that forced expression is as much an infringement on their freedom of expression as is the regulation or prohibition of expression: Lavigne v. Ontario Public Service Employees Union, 1991 68 (SCC), [1991] 2 S.C.R. 211.
[65] Section 24 of the AEP By-law does not run afoul of s. 2(b) in my view, however. To adopt the words of Wilson J. in Lavigne (at 267), the City’s purpose in enacting the notice provision was not “to put a particular message into the mouth of the [appellants]”; rather, it was to promote the more general purposes of the by-law, namely, the health and safety of the public and consumer protection. Nor is the effect of the by-law to infringe the appellants’ right to freedom of expression. To quote Lavigne at 279-80:
[I]t would be my view that as a matter of principle concerns over public identification and opportunity to disavow should form part of the s. 2(b) calculus. … If a law does not really deprive one of the ability to speak one’s mind or does not effectively associate one with a message with which one disagrees, it is difficult to see how one’s right to pursue truth, participate in the community, or fulfill oneself is denied.
[66] Here, the owner or operator of the adult entertainment parlour is not necessarily or automatically associated with the message, or with a message with which he or she does not agree, and there is nothing to prevent an owner or operator from posting their own message in conjunction with the s. 24 message disavowing it and saying it is only posted for purposes of compliance with the AEP By-law. Accordingly, there is no violation of the appellants’ freedom of expression.
[67] Even if there were, however – as Mr. Rankin submits on behalf of the City – the provision can be saved under s. 1. The objectives of the notice (protecting the health and safety of the public and consumer protection) are pressing and substantial, and the posting of the notice is rationally connected to that objective (the public is informed of what is prohibited and how sexually transmitted infections can be spread). For the reasons stated above, the notices minimally impair the rights of the appellant and any harmful effects of requiring the appellants to post them are outweighed by the benefits associated with public notification (increased public awareness and improved public health and safety and consumer protection). The provisions of the By-law therefore meet the proportionality test.
Sections 7 and 8 of the Charter
[68] The application judge declined to rule on the appellants’ arguments that,
a) their privacy rights under s. 7 of the Charter were violated by requirements in the AEP By-law that personal employment information be kept in the adult entertainment parlours and that floor plans be posted in the premises; and
b) the enforcement provisions of the by-law allow unreasonable search and seizure, contrary to ss. 7 and 8 of the Charter.
[69] In my view he was correct in doing so. Context determines issues surrounding a reasonable expectation of privacy and questions of search and seizure. Here, the appellants established no evidentiary record to provide that context. Claimants must provide a factual basis for their claims, not a basis founded on hypothesis: Danson v. Ontario (A.G.), 1990 93 (SCC), [1990] 2 S.C.R. 1086 at 1101. As the application judge noted, the appellants will be free to raise these issues in the appropriate proceedings, on the basis of a proper record, should the occasion arise. “The process of constitutional litigation remains firmly grounded in the discipline of the common law methodology”: Danson, ibid.
8. The AEP By-law is not Colourable Municipal Legislation
[70] In the Toronto AEP By-law case, this Court rejected the argument that a very similar by-law was a colourable attempt by Toronto to enact criminal law legislation in the area of morality, something a municipality has no constitutional authority to do. Here, the appellants take a different approach: they submit the AEP By-law is a colourable attempt on the part of Ottawa to govern matters already covered in other provincial regulatory statutes, namely, the Liquor Licence Act and the Health Protection and Promotion Act. This duplication, they say, reveals the By-law’s true purpose: to drive adult entertainment establishments out of business.
[71] I have already rejected this latter argument and I will not repeat the reasons here.
[72] The colourability doctrine applies to prevent Parliament or a provincial legislature from doing indirectly what it is precluded from doing directly by reason of the constitutional division of powers. Here, there is no conflict between federal or provincial legislation. A municipality may not legislate in an area already occupied by the province, however, and a by-law will be ineffective in such circumstances if it cannot pass the “impossibility of dual compliance” test laid down in Multiple Access Ltd. v. McCutcheon, 1982 55 (SCC), [1982] 2 S.C.R. 161. That is, the by-law will not be invalid unless there is actual conflict between the by-law and the provincial legislation such that compliance with one will constitute defiance of the other. The appellants’ argument on this point falls more into this latter category.
[73] Nonetheless, the mere existence of provincial legislation in a given field does not oust the powers of a municipality to regulate a subject matter. Where there is no barrier to dual compliance, the by-law will stand. See Spraytech, supra, at para. 39. The appellants were not able to point to any specific ways in which they allege the AEP By-law actually conflicts with the licensing or regulatory schemes enacted by the province pursuant to either the Liquor Licence Act or the Health Protection and Promotion Act.
10. Costs
[74] Finally, in their Supplementary Notice of Appeal the appellants ask that the application judge’s decision as to costs be set aside. In their factum, their sole submission in this regard is that “Hackland J. erred in law in awarding costs to the Respondent”. Mr. Manning did not pursue this point in oral argument, and I would not interfere with the application judge’s ruling on costs.
DISPOSITION
[75] For the foregoing reasons, I would dismiss the appeal.
[76] The respondent is entitled to its costs of the appeal, fixed in the amount of $45,000.00, all inclusive.
‘R.A. Blair J.A.”
“I agree S.T. Goudge J.A.”
“I agree H.S. LaForme J.A.”
RELEASED: May 24, 2007
APPENDIX I
SECTION 150
General licensing powers
- (1) Subject to the Theatres Act and the Retail Business Holidays Act, a local municipality may license, regulate and govern any business wholly or partly carried on within the municipality even if the business is being carried on from a location outside the municipality.
Purposes
(2) Except as otherwise provided, a municipality may only exercise its licensing powers under this section, including imposing conditions, for one or more of the following purposes:
Health and safety.
Nuisance control.
Consumer protection.
Explanation
(3) A by-law licensing or imposing any condition on any business or class of business passed after this section comes into force shall include an explanation as to the reason why the municipality is licensing it or imposing the conditions and how that reason relates to the purposes under subsection (2).
Notice
(4) Before passing a by-law under this section, the council of the municipality shall, except in the case of emergency,
(a) hold at least one public meeting at which any person who attends has an opportunity to make representation with respect to the matter; and
(b) ensure that notice of the public meeting is given.
Special case
(5) If a by-law is passed under this section in the case of an emergency without complying with subsection (4), the council shall, as soon as is practicable after its passage, hold the meeting and give the notice referred to in subsection (4) and may, after that meeting, amend or repeal the by-law without the requirement of a further meeting.
Scope of power
(6) Businesses that may be licensed, regulated and governed under subsection (1) include,
(a) trades and occupations;
(b) exhibitions, concerts, festivals and other organized public amusements held for profit or otherwise;
(c) the sale or hire of goods or services on an intermittent or one-time basis and the activities of a transient trader; and
(d) the display of samples, patterns or specimens of goods for the purpose of sale or hire.
Exclusions
(7) Subsection (1) does not apply to,
(a) a manufacturing or an industrial business, except to the extent that it sells its products or raw material by retail;
(b) the sale of goods by wholesale; or
(c) the generation, exploitation, extraction, harvesting, processing, renewal or transportation of natural resources.
Powers re: licences
(8) Without limiting subsection (1), the power to license, regulate and govern a business includes the power,
(a) to prohibit the carrying on of or engaging in the business without a licence;
(b) to refuse to grant a licence or to revoke or suspend a licence;
(c) to fix the expiry date for a licence;
(d) to define classes of businesses and to separately license, regulate and govern each class;
(e) to impose conditions as a requirement of obtaining, continuing to hold or renewing a licence, including conditions,
(i) requiring the payment of licence fees,
(ii) restricting the hours of operation of the business,
(iii) allowing, at any reasonable time, the municipality to inspect the places and premises used for the business and the equipment, vehicles and other personal property used or kept for hire in the carrying on of the business,
(iv) prohibiting places or premises used for the business to be constructed or equipped so as to hinder the enforcement of the by-law;
(v) requiring the premises of the business, or part of the premises, to be accessible to persons with disabilities;
(f) to impose special conditions on a business in a class that have not been imposed on all of the businesses in that class in order to obtain, continue to hold or renew a licence;
(g) to impose conditions, including special conditions, as a requirement of continuing to hold a licence at any time during the term of the licence;
(h) to license, regulate or govern the place or premises used for the business and the persons carrying it on or engaged in it;
(i) to regulate or govern the equipment, vehicles and other personal property used or kept for hire in connection with the carrying on or engaging in the business; and
(j) to exempt any business or person from all or any part of the by-law.
(k) without limiting anything in clauses (a) to (j), to require the payment by a licensed business of additional fees at any time during the term of the licence for costs incurred by the municipality attributable to the activities of the business.
Licence fees
(9) The total amount of fees to be charged for licensing a class of business shall not exceed the costs directly related to the administration and enforcement of the by-law or portion of the by-law of the municipality licensing that class of business.
Types of allowable costs
(10) Without limiting subsection (9), costs directly related to the administration and enforcement of the by-law may include costs related to,
(a) the preparation of the by-law;
(b) inspections related to the by-law;
(c) the enforcement of the by-law against a person operating a business without a licence;
(d) prosecution and court proceedings; and
(e) a reciprocal licensing arrangement under section 156.
Exercise of power
(11) The exercise of a power under clause (8) (b), (f) or (g) is in the discretion of council and council shall exercise its discretion,
(a) upon such grounds as are set out in the by-law; or
(b) upon the grounds that the conduct of any person, including the officers, directors, employees or agents of a corporation, affords reasonable cause to believe that the person will not carry on or engage in the business in accordance with the law or with honesty and integrity.
Limitation
(12) Despite subsection (8), a municipality shall not, except as otherwise provided, refuse to grant a licence for a business under this Part by reason only of the location of the business.
Compliance with land use control by-laws
(12.1) Despite subsection (12), a by-law licensing a business may require as a condition of obtaining, continuing to hold or renewing a licence that the business comply with land use control by-laws or requirements under the Planning Act or any other Act.
Continuation
(12.2) Despite subsection (12.1), a municipality shall not refuse to grant a licence by reason only of the location of the business if the business was being lawfully carried on at that location at the time the by-law requiring the licence came into force so long as it continues to be carried on at that location.
Expiry of a by-law
(13) A by-law licensing a business under this Part expires five years after it comes into force or the day it is repealed, whichever occurs first.
Amendments
(14) Amendments to a by-law licensing a business do not affect the term of the by-law.
SECTION 151
Adult entertainment establishments
- (1) A by-law under section 150 that licenses, regulates and governs adult entertainment establishments may,
(a) despite subsection 150 (12), define the area of the municipality in which adult entertainment establishments may or may not operate and limit the number of licences granted in any defined area in which they are permitted;
(b) regulate and prohibit the placement, construction, size, nature and character of signs, advertising, and advertising devices, including any printed matter, oral or other communication or thing used to promote adult entertainment establishments; and
(c) prohibit any person carrying on or engaged in an adult entertainment establishment business for which a licence is required from permitting any person under the age of 18 years to enter or remain in the adult entertainment establishment or any part of it.
Premises
(2) Any premises or any part of them is an adult entertainment establishment if, in the pursuance of a business,
(a) goods, entertainment or services that are designed to appeal to erotic or sexual appetites or inclinations are provided in the premises or part of the premises; or
(b) body-rubs, including the kneading, manipulating, rubbing, massaging, touching or stimulating by any means of a person's body, are performed, offered or solicited in the premises or part of the premises, but does not include premises or part of them where body-rubs performed, offered or solicited are for the purpose of medical or therapeutic treatment and are performed or offered by persons otherwise duly qualified, licensed or registered to do so under the laws of the Province of Ontario.
Power of entry
(3) A municipality may, at any time of the day or night, enter any adult entertainment establishment licensed, regulated or governed by a by-law under section 150 to determine whether the by-law is being complied with and, for this purpose, may make such examinations, investigations and inquiries as are necessary.
Other powers not affected
(4) Nothing in this section affects the power that may be exercised by a municipality under this or any other Act to license, regulate or govern any other business.
Evidence rule
(5) For the purpose of a prosecution or proceeding under a by-law licensing, regulating or governing adult entertainment establishments, the holding out to the public that the entertainment or services described in subsection (2) are provided in the premises or any part of them is admissible in evidence as proof, in the absence of evidence to the contrary, that the premises or part of them is an adult entertainment establishment.
DATE: 20070629
DOCKET: C44218
COURT OF APPEAL FOR ONTARIO
GOUDGE, BLAIR and LAFORME JJ.A.
BETWEEN:
THE ADULT ENTERTAINMENT ASSOCIATION OF CANADA, THE NUDEN, THE BAREFAX INC., BARBARELLA DIAMONDS, SILVER DOLLAR, OASIS SHOW BAR, THE PLAYMATE, POLAR BARE CLUB, JOSEPH BENTIVOGLIO, DOUG PETTIT, PIERRE GROULX, MICHAEL NORWOOD, ROBERT AUTUMN, JACQUES CAMPEAU, PATRICK CAMPEAU, LARRY LEPINE, MICHELENE DECLARE, DAWN SANDEY AND JILL MANSFIELD[^6]
Appellants
and
THE CORPORATION OF THE CITY OF OTTAWA
Respondent
Morris Manning Q.C., for the applicants, appellants
Michael Rankin and Martin Thompson, for the respondent, respondent
Heard: January 18, 2007
On appeal from the judgment of Justice Charles T. Hackland of the Superior Court of Justice, dated August 30, 2005, with reasons reported at 14 M.P.L.R. (4th) 17.
ADDENDUM
[1] The reasons for judgment in this appeal were released on May 24, 2007.
[2] Paragraph 48 of the Reasons for judgment is deleted and replaced with the following:
[48] There is both a legal and a factual impediment to this argument. First, the legal impediment. Although the notice of appeal and facta were served on the Attorney General for Canada and the Attorney General for Ontario, no notice of constitutional question with respect to the constitutionality of s. 272 was served as required (this was pointed out to the appellants in correspondence from the Attorney General for Ontario). Accordingly, the argument is not open to the appellants: Courts of Justice Act, R.S.O. 1990, c. C.43, s. 109.
“R.A. Blair J.A.”
[^1]: A Notice of Abandonment of the appeal was filed on January 17, 2007 on behalf of the appellants The NuDen, Fanny’s Cabaret Lounge, Polar Bare Club, Joseph Bentivoglio, Robert Autumn, and Larry Lepine.
[^2]: Other industries affected by the by-law harmonization process included taxis, limousines, tobacco vendors and snow plow contractors.
[^3]: Appellants’ factum, para. 83.
[^4]: And, in this case, the location in which live entertainment and services may be provided.
[^5]: From the definition of “adult entertainment parlour” found in s. 1 of the AEP By-law.
[^6]: A Notice of Abandonment of the appeal was filed on January 17, 2007 on behalf of the appellants The NuDen, Fanny’s Cabaret Lounge, Polar Bare Club, Joseph Bentivoglio, Robert Autumn, and Larry Lepine.