CITATION: Paradise Night Club v. Municipality of Leamington, 2022 ONSC 6118
DIVISIONAL COURT FILE NO.: 21-514
DATE: 20221101
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SFJ Stevenson, Backhouse and Gomery JJ.
B E T W E E N:
Paradise Night Club (Oscar David Gutierrez Ramirez)
Applicant
- and -
Municipality of Leamington
Respondent
Raymond Colautti, for the Applicant
Jameson S. Pritiko, for the Respondent
HEARD by videoconference in Toronto: October 26, 2022
Backhouse J.
REASONS FOR JUDGMENT
Overview
[1] This is an application for judicial review of a decision by the Appeal Committee of the Municipality of Leamington made May 31, 2021. The Appeal Committee upheld an earlier decision by the Municipality’s Issuer of Licences which denied Oscar David Gutierrez Ramirez (the “Applicant”) a business license to operate Paradise Night Club (the “Tavern”) at 44 Talbot Street, Leamington, Ontario.
[2] The Applicant asks the Court to quash the Appeal Committee’s decision and to direct the Municipality to issue a business licence to him instead of remitting the appeal back for reconsideration. He relies, in part, on an affidavit he has filed in support of the application. The Municipality asks the Court to strike out portions of the Applicant’s affidavit and to dismiss the application.
[3] For the reasons set out more fully below, the May 31, 2021 decision of the Appeal Committee is quashed. I would allow the application because the Appeal Committee hearing was procedurally unfair, and its decision was unreasonable because it did not provide any insight into why the Applicant’s appeal was denied. It is unnecessary to rule on the Muncipality’s motion to strike portions of the Applicant’s motion.
[4] With respect to remedy, this is not a case where a particular outcome is inevitable. Accordingly, it would not be appropriate for this Court to direct the Municipality to issue a business licence to the Applicant instead of remitting the matter back for reconsideration. The issue of whether a business licence should be issued to the Applicant is therefore remitted to a different appeal committee for reconsideration in accordance with these reasons.
Background
[5] The Municipality’s By-law 05-19 prohibits a person from operating a business in the Municipality without a business licence.[^1] The Issuer of Licences (“Issuer”) makes decisions regarding applications for a business licence.[^2] Grounds to refuse an application are set out at s. 32 of the By-law and include:
• Ground 1: Where the past or present conduct of the applicant gives rise to a reasonable belief that issuing them a licence would be adverse to the public interest;
• Ground 2: Where the applicant’s business premises fail to comply with the Building Code Act, 1992 or Property Standard By-law; and
• Ground 3: Where there are reasonable grounds to believe the applicant will not comply with any federal or provincial statute or regulation or the Licensing By-law.[^3]
[6] In September 2018, the Applicant submitted an application for a business licence for the Tavern in the category of “Eating Establishment”. The Tavern is the main source of income for the Applicant and his family. He was permitted to continue operating it while awaiting a decision on his application.
The Issuer of Licences’ Decision
[7] On March 29, 2021, the Applicant was notified that his application had been refused by Ruth Orton, the Director of Legal and Legislative Services for Leamington and the Issuer of Licences. She cited Subsections (a), (c), (d), (e), and (h) of Section 32 of the Business By-law as grounds for the refusal, particularly:
a) The Applicant does not meet all of the requirements of the Business By-law;
c) The past or present conduct of the Applicant, or of any partner where the Applicant is a partnership, or any director, officer or shareholder of the corporation where the Applicant is a corporation, or any person who the Issuer of Licenses reasonably believes exercises control over the Applicant or the Business Premises is such that the Issuer of Licences reasonably believes that the issuance or renewal of a Business licence would be adverse to the public interest;
d) The Issuer of Licences believes that operating the Business may be adverse to the public interest;
e) The Issuer of Licences has reasonable grounds to believe that the Applicant will not comply with any federal or provincial statute or regulation or the Business Bylaw;
… and
h) The Business Premises or intended Business Premises do not comply with the Comprehensive Zoning By-law, the Building Code Act, the Fire Protection and Prevention Act and/or the Property Standards By-law or the intended Business Premises are otherwise dangerous or unsafe.
[8] In addition to these grounds, the Applicant was found to have failed to submit all documents necessary to process the application (i.e., inspection reports from the Windsor-Essex County Health Unit, the Fire Chief and a Food Handler Certification Card, per section 32(a) of the By-law).
The Appeal
[9] The Applicant appealed the Issuer’s decision to the Appeal Committee, pursuant to By-laws 05-19 and 64-16.[^4] The committee is comprised of three members of the Municipality’s council. It is empowered to issue a licence, with or without conditions, or to refuse to issue a licence. Hearings are governed by the rules of procedure set out in By-law 64-16. Parties may file and serve documentary evidence in advance of the hearing. They may also call and cross-examine witnesses at the hearing and make submissions.[^5] The Rules define “Respondent” as the “administrative official whose decision is the subject of the appeal”. That was Ruth Orton in the Applicant’s case.
[10] The conduct of the hearing is governed by s. 18 and s. 19 of By-law 64-16:
- Unless otherwise directed by the Appeal Committee, the conduct of the hearing shall be as follows:
(a) presentation of the evidence of the Appellant;
(b) cross-examination by the Respondent;
(c) questions from the Appeal Committee;
(d) presentation of evidence by the Respondent;
(e) cross examination by the Appellant;
(f) questions from the Appeal Committee;
(g) reply evidence from the Appellant (if any);
(h) cross-examination on the reply evidence by the Respondent; and
(i) questions from the Appeal Committee.
- At the end of the hearing, each Party may give brief submissions summarizing the evidence and describing why it should result in the decision requested.
The Appeal Hearing
[11] The hearing took place on May 31, 2021. The Applicant attended, represented by a licensed paralegal. Ruth Orton, the Respondent Issuer, did not personally attend. The Municipality was represented by its lawyer, Mr. Pritiko.
[12] The hearing started before the Applicant and his representative were permitted to enter the zoom hearing. Mr. Pritiko, counsel for the Municipality, was introduced to the Appeal Committee as “our solicitor”. Throughout the hearing, the Chair referred to Mr. Pritiko by his first name. When the Applicant and his representative were admitted to the hearing, the Applicant’s representative began by asking the Appeal Committee why it took three years to get a decision on the licence application and why the Applicant had not been advised prior to the licence refusal that there were documents which were required that were missing from the application. The Chair sought the help of Mr. Pritiko who took the opportunity to move to presenting the Municipality’s case.
[13] Mr. Pritiko acknowledged that the Applicant had provided documents “which seem to remedy most, if not all, of those [missing document] issues”. He then went on to make submissions and give evidence in regard to various documents which had been provided in advance to the Appeal Committee and Applicant. Documents were not marked as exhibits at the hearing. No witnesses were called. The Chair then stated that there should be cross-examination by the Applicant’s representative. Mr. Pritiko stated that it would not be proper for him to be cross-examined but then went on to give further evidence, state opinions and make submissions. When the Applicant’s representative sought to have the Applicant provide an explanation, Mr. Pritiko objected on the basis that the time for him to provide evidence had come and gone. The hearing ended with the Chair and Mr. Pritiko both asserting that the hearing process required the Applicant to give evidence first and did not allow him to give evidence after the Municipality presented its case. Submissions were then made, and the hearing concluded.
The Appeal Committee’s Decision
[14] The Appeal Committee unanimously upheld the Issuer’s decision as follows:
• The respondent [Applicant herein] had failed to submit a number of documents to process the application;
• The respondent’s past or present conduct was such that there was reason to believe that the issuance of a business licence would be adverse to the public interest and that operating the business may be adverse to the public interest;
• There are reasonable grounds to believe that the respondent would not comply with any federal or provincial statute or regulation or the Licensing By-law.
The Appeal Committee did not indicate what facts or evidence it relied upon to deny the appeal. The reasons made no reference to the submissions made on behalf of the Applicant. The decision simply set out the conclusions listed above.
Court’s Jurisdiction
[15] This Court has jurisdiction to hear the application pursuant to ss. 2(1) and 6(1) of the Judicial Review Procedure Act.[^6]
Standard of Review
[16] The parties agree that the standard of review is reasonableness. Issues of procedural fairness are reviewed in this Court on a correctness standard through the lens of the factors set out in Baker.[^7]
Preliminary Issue
[17] The Municipality submits that portions of the Applicant’s affidavit should be struck out for failure to meet the limited circumstances in which such evidence is admissible on judicial review.
[18] It was necessary for the Applicant to file an affidavit because he had to present evidence showing that he was effectively denied the right to present his case, as will be dealt with more extensively below. However, some of the material in the affidavit went beyond the exceptional circumstances in which such evidence is admissible on judicial review. As there was only one reference to the affidavit evidence in the submissions made on behalf of the Applicant and I do not rely upon that reference in reaching this decision, it is not necessary to make a decision on which portions of the affidavit are admissible.
Issues
[19] The application raises the following issues:
Was there a breach of procedural fairness or a reasonable apprehension of bias?
Is the decision unreasonable?
Applicant’s Position
[20] The Applicant submits he did not receive a fair hearing before the Appeal Committee. He asserts that:
The Appeal Committee started the hearing without the Applicant and his paralegal representative present during which the Committee Chair introduced the Municipality’s lawyer as “our solicitor”. The Applicant did not find out about this until the transcript was obtained, so could not object at the hearing. The Applicant asserts that Mr. Pritiko acted as the lawyer for both the Municipality and the Appeal Committee. He argues that Mr. Pritiko’s dual role meets the test for a reasonable apprehension of bias.
The Applicant was denied procedural fairness because the Issuer, Ruth Orton, did not appear, even though she was the respondent in the matter according to the Appeal Committee’s rules. No direction was made by the Appeal Committee to explain why she was permitted not to attend. Three of the five grounds relied upon to deny a business licence to the Applicant were based on Ms. Orton’s reasonable beliefs or reasonable grounds. Without Mr. Orton’s attendance at the Appeal Committee, the Applicant submits that he was unable to question the basis upon which she denied the business licence. The Applicant was denied an opportunity to cross-examine her and was not allowed to cross-examine Mr. Pritiko on the sources and reliability of his hearsay evidence.
Mr. Pritiko wore four hats at the hearing: a) lawyer for the Municipality; b) lawyer for the Appeal Committee; c) the Respondent; and d) a witness.
Respondent’s Position
[21] The Respondent submits that the Applicant’s claim that there was a reasonable apprehension of bias is based on the unfounded allegation that Mr. Pritiko was the lawyer for the Appeal Committee. The Applicant misconstrued the Chair of the Appeal Committee’s introductory remarks, his sole piece of supporting evidence. An informed person would see that the Chair was presenting Mr. Pritiko as one of two employees of the Municipality, not as the lawyer for the Appeal Committee. The Respondent submits that the Applicant received the appropriate level of procedural fairness. The Applicant did not raise any concerns about fairness at the hearing itself. This includes concerns about the absence of the Issuer. He cannot now claim that her presence was necessary to a fair adjudication of the matter when he did not raise an objection at the relevant time. In any event, parties can be represented by their legal counsel. The Applicant’s arguments going to the reliability of documentary evidence presented at the hearing must fail as the Municipality relied upon the certified municipal record. Further, the tribunal is empowered to admit any document even if unsworn or inadmissible in court.[^8]
Legal Principles
[22] There is discretion and flexibility respecting the process before administrative tribunals, and so it cannot be said there is always a single "correct" view of the procedures to be followed. However, administrative discretion must be exercised in a way that is procedurally fair.[^9]
[23] The factors that are to be considered in assessing procedural fairness include: the nature of the decision and the decision making-process; the nature of the scheme in which the decision maker operates; the importance of the decision to the individuals affected; the legitimate expectations of the party challenging the decision; and the nature of the deference to be accorded to the decision making body (“the Baker factors”).[^10]
[24] In addressing an allegation of bias, this Court must ask: would an informed person, viewing the matter realistically and practically, and having thought the matter through, think it is more likely than not that the decision-maker, whether unconsciously or consciously, would not decide the matter fairly?[^11]
Analysis
Issue 1 : Was there a breach of procedural fairness or a reasonable apprehension of bias?
[25] The requirements for the conduct of a hearing specified in s. 18 and s. 19 of By-law 64-16 were not met at the May 31, 2021 hearing by the Appeal Committee. There was no direction by the Appeal Committee that the requirements did not need to be met. There is an onus on the Appeal Committee to follow its own procedures and conduct a fair hearing. That is particularly the case where the stakes are high because the Applicant’s livelihood is at issue.
[26] It was not necessary for Ms. Orton as the licence Issuer to personally attend the hearing as the respondent. She could appoint an appropriate representative of the Municipality to attend as the respondent. However, it was inappropriate for Mr. Pritiko to both appear as counsel for the Municipality and to give evidence on behalf of the Municipality. Mr. Pritiko went well beyond presenting documents in the certified municipal record. As the Municipality points out, the Appeal Committee is empowered to admit any document even if unsworn or inadmissible in court. However, in this case the Appeal Committee received documents which had no evidentiary value in themselves and allowed Mr. Pritiko to expand on them.
[27] In one instance in support of it being adverse to the public interest that the Applicant be issued a licence, Mr. Pritiko simply read to the Appeal Committee the notes in an inspection report of Derrick Clark, a member of the Leamington Fire Service, with respect to orders which were issued relating to Paradise Night Club and well as another property owned by the Applicant. Mr. Pritiko brought to the Appeal Committee’s attention that the notes referenced pending prosecutions. Without establishing what, if any, pending prosecutions there were against the Appellant, Mr. Pritiko then went on to state, apparently in support of the ground that the Applicant will not comply with the law, that the Issuer had been advised of certain pending prosecutions against the Applicant. Notwithstanding that Mr. Clark was present at the hearing and all the issues that he had located had been remedied, Mr. Pritiko advised that he did not intend to call Mr. Clark unless the Appeal Committee felt it would be of some assistance. No ruling was made that Mr. Clark be called.
[28] In other instances, Mr. Pritiko presented photographs with no information on when they had been taken or by whom. He then gave evidence about what was in the picture and that it was a legal violation.
[29] Mr. Pritiko gave evidence and his opinion on documents on which he had no first-hand knowledge. He then declined to be cross-examined.
[30] The Municipality relies upon the Applicant having elected not to give evidence. For the Municipality to rely upon this, it needed to be clearly spelled out to the Applicant at the hearing by the Chair, that he was waiving the right and would not have a further opportunity. This did not occur. In fact, when Mr. Pritiko began to set out the Municipality’s case at the beginning of the hearing, he said: I’d like to present the evidence of the Municipality, and if Mr. Gutierrez’s representative has submissions that he’d like to make at the end, there’s a time for that.” The term “submissions” is ambiguous. In the absence of any warning that he must present evidence immediately or be held to waive the right to do so, the Applicant may well have believed that he was being invited to present both evidence and argument after Mr. Pritiko made his remarks. This in fact seems to be what he believed, based on his representative’s unsuccessful attempt, later in the hearing, to present evidence.
[31] The transcript of the appeal hearing does not support the Applicant’s submission that Mr. Pritiko acted as the Appeal Committee’s solicitor. However, the fact that he was introduced by the Chair at the hearing as “our solicitor”, without correction and prior to the Applicant and his counsel having been admitted to the hearing, raises a concern as to whether the Appeal Committee misconstrued Mr. Pritiko’s role. I do not agree with the Municipality’s submission that it is clear that the Chair is not identifying the lawyer as the solicitor for the Appeal Committee. It certainly was not clear to the Applicant.
[32] It is also concerning that the Chair referred to Mr. Pritiko by his first name during the hearing, creating an impression that Mr. Pritiko had an advantage with the Appeal Committee. While these matters may seem insignificant or innocent, they could reasonably cause the Applicant to conclude that the Appeal Committee was aligned with the Municipality and would not decide the issues fairly.
[33] The Municipality objects to the Applicant raising concerns about fairness on this application where such concerns were not raised at the hearing itself. If a party failed to object before the decision maker, it generally cannot raise an objection for the first time on judicial review.[^12]
[34] Some of the issues the Applicant could not have objected to at the hearing. These include not being admitted to the hearing at the outset, and Mr. Pritiko being introduced as “our solicitor”, as the Applicant only learned of these matters after he reviewed the transcript. Other procedural fairness issues the Applicant relies upon could and should have been raised at the hearing. However, when the transcript of the hearing is considered in full, it can in no way be said that the Applicant received the appropriate level of procedural fairness. The transcript of the hearing does not support the Municipality’s submission that the Applicant “was given the full opportunity to be heard at the hearing inclusive of the presentation of evidence and submissions.” Rather, the Applicant was effectively denied the right to present his case in accordance with the rules of the Appeal Committee for the conduct of an appeal hearing.
[35] There is an obligation on the Appeal Committee to conduct a fair hearing and follow its own rules of procedure, even in the absence of an objection by the Applicant. As the Municipality’s counsel, Mr. Pritiko should have also been alive to this obligation.
[36] I do not go so far as to find that there was a reasonable apprehension of bias. Because there is a presumption of judicial impartiality, the test for a reasonable apprehension requires a real likelihood or probability of bias.[^13] Nevertheless, the object is to protect public confidence in the legal system by ensuring not only the reality but the appearance of a fair adjudicative process.[^14] From the Applicant’s perspective, the appearance of a fair adjudicative process was lacking which the new appeal committee should bear in mind at a rehearing.
[37] Considering the appeal hearing as a whole, I have concluded that the Applicant was denied procedural fairness.
Issue 2: Is the decision unreasonable?
[38] The decision is unreasonable because no one reading the decision could understand the basis upon which the licence was denied. The Appeal Committee seems to have adopted full-scale the conclusions of the Issuer without articulating any rationale for doing so. That included the ground of failing to submit all documents necessary to process the application which appears to have been remedied by the time of the hearing. There is a complete absence of anything to enable this Court, or the Applicant, to understand the basis of its decision and to determine whether its decision holds water.
[39] The Municipality points out that there is no requirement for written reasons in the rules of the Appeal Committee for conducting appeal hearings. This may be so but, if written reasons are issued, they must be intelligible, either on their own or in conjunction with any decision delivered orally. There was no oral decision here, leaving the Applicant and the Court only with a written decision that reveals nothing about the rationale for denying the appeal.
[40] When the decision in question involves the potential for significant personal impact or harm the Supreme Court of Canada in Vavilov[^15] has told us that the reasons provided to that individual must reflect what is at stake for them:
[133] It is well established that individuals are entitled to greater procedural protection when the decision in question involves the potential for significant personal impact or harm: Baker, at para. 25. However, this principle also has implications for how a court conducts reasonableness review. Central to the necessity of adequate justification is the perspective of the individual or party over whom authority is being exercised. Where the impact of a decision on an individual’s rights and interests is severe, the reasons provided to that individual must reflect the stakes. The principle of responsive justification means that if a decision has particularly harsh consequences for the affected individual, the decision maker must explain why its decision best reflects the legislature’s intention. This includes decisions with consequences that threaten an individual’s life, liberty, dignity or livelihood.
[41] The Municipality points out that the Appeal Committee could have upheld the Licence Issuers’ decision if it agreed with even one of the bases for denial. It argues that we should conclude that at least one of the grounds set out in its decision withstands scrutiny. We do not know, however, why the Committee reached any of the conclusions cited in its decision. It is therefore impossible to tell if any of the conclusions were reasonable.
[42] This is not a case where a particular outcome is inevitable. Accordingly, it would not be appropriate for this Court to direct the Municipality to issue a business licence to the Applicant. The procedural problems set out above, however, together with the complete lack of reasons to support the Appeal Committee’s conclusions, lead me to conclude that this matter must be remitted back to a different appeal committee for reconsideration in accordance with these reasons.
Conclusion
[43] The application is allowed, and the matter is remitted to a different appeal committee for reconsideration in accordance with these reasons.
[44] The parties agree on costs as follows: $2,000 to the successful party on the motion and $4,300 to the successful party on the application. As was stated above, it was necessary for the Applicant to file an affidavit but some of the material went beyond “exceptional circumstances”. It is apparent that success would have been divided, had it been necessary to decide the motion. Accordingly, the Applicant as the successful party on the application is awarded costs of the application of $4300, plus a reduced amount of $700 for the mixed success on the motion, making a total costs award to the Applicant of $5,000 plus HST.
Backhouse J.
I agree____________________________
SFJ Stevenson
I agree____________________________
Gomery J.
Released: November 1, 2022
CITATION: Paradise Night Club v. Municipality of Leamington, 2022 ONSC 6118
DIVISIONAL COURT FILE NO.: 21-514
DATE: 20221101
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SFJ Stevenson, Backhouse and Gomery JJ.
B E T W E E N:
PARADISE NIGHT CLUB (OSCAR DAVID GUTIERREZ RAMIREZ)
Applicant
- and -
Municipality of Leamington
Respondent
REASONS FOR JUDGMENT
Backhouse J.
Released: November 1, 2022
[^1]: Corporation of Municipality of Leamington By-law 05-19. [^2]: By-law 05-19, at s. 15. [^3]: FRP, at paras. 1-4 [B220]. [^4]: By-law 05-19, at s. 34; By-law 64-16. [^5]: By-law 64-16, at ss. 15-19. [^6]: R.S.O. 1990, c. J.1. [^7]: Chiarelli v. Ottawa (City of), 2021 ONSC 8256, at para. 18; Mission Institution v. Khela, 2014 SCC 24, at para. 79, both citing Baker v. Canada (Minister of Citizenship and Immigration), 1999 699 (SCC), [1999] 2 S.C.R. 817. [^8]: Municipal Act, 2001, S.O. 2001, c. 25, at s. 447.6(1); Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, at s. 15. See also, By-law 64-16, at s. 4. [^9]: Quadrexx Hedge Capital, Management Ltd. v. Ontario (Securities Commission), [2020] O.J. No. 3262 at para 81. [^10]: Baker v. Canada (Minister of Citizenship and Immigration), 1999 699 (SCC), [1999] 2 S.C.R. 817 ("Baker"), paras. 22-27. [^11]: Yukon Francophone School Board, Education Area No. 23 v. Yukon Territory (Attorney General), 2015 SCC 25, at paras. 20-21; Fabrikant v. Ontario Judicial Council, 2022 ONSC 336 at para 20. [^12]: Bernard v. Canada Revenue Agency 2015 CAF 263, at para.26-30. [^13]: Yukon Francophone School Board, Education Area No. 23 v. Yukon Territory (Attorney General), 2015 SCC 25, at paras. 25. [^14]: Yukon Francophone School Board, Education Area No. 23 v. Yukon Territory (Attorney General), 2015 SCC 25, at paras. 22. [^15]: Canada (Minister of Citizenship and Immigration ) v. Vavilov, 2019 SCC 65 at para.133.```