ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 06-CV-323637PD1
DATE: 20131025
BETWEEN:
1786889 Ontario Inc.
Applicant
– and –
City of Toronto
Respondent
Morris Manning, Q.C., for the Applicant
Ansuya Pachai, for the Respondent
HEARD: September 10, 2013
J. Wilson J.
REASONS FOR JUDGMENT
The Application
[1] The applicant 1786889 Ontario Inc. is one of the twenty-five body rub parlours licensed by the City of Toronto and is carrying on business as the Goodmark Aromatherapy Center (“Goodmark”).
[2] In December 2005, the respondent City of Toronto (the “City”) passed By-law No. 1055-2005 (the “By-law”) to reduce the permissible hours of operation of licensed body rub parlours and holistic centres carrying on unlicensed body rub activity.
[3] The By-law’s preamble states that “the City of Toronto has decided that activities carried out in and around Body Rub Parlours have a detrimental impact on the enjoyment of other properties in their vicinity and neighbourhood, and that limiting the hours of operation of these businesses will help to control this nuisance.”
[4] Prior to the passage of the By-law, body rub parlours in Toronto were able to stay open from 9:00 a.m. to 1:00 a.m. seven days a week. The By-law reduced hours of operation to 9:00 a.m. to 9:00 p.m. Mondays to Saturdays and 12:00 p.m. to 5:00 p.m. on Sundays and holidays.
[5] The application is for an order quashing the By-law.
[6] The applicant also seeks a declaration that City of Toronto By-law No. 514-2002 (the “Master By-law”) is of no force and effect. The Master By-law regulates various businesses, including body rub parlours.
The Position of the Parties
[7] The applicant asserts that the By-law and the Master By-law have expired under the sunset clause in s. 150(13) of the Municipal Act, 2001, S.O. 2001, c. 25. The sunset clause limits the effect of any by-law to five years.
[8] The applicant also asserts that City Council inappropriately regulated both licensed and unlicensed body rub activity, when the primary nuisance concern was the increase in unlicensed body rub activity being conducted under the guise of a legitimate holistic business. Goodmark is located in a commercial mall. The applicant argues that the previous permissible hours of operation for licensed body-rub parlours until 1:00 a.m. did not adversely affect local businesses or the neighbourhood, and did not constitute a nuisance.
[9] Finally, the applicant asserts that there was an inadequate factual record to show that licensed body rub parlours constituted a nuisance justifying the By-law. The initial staff report to City Council did not recommend changing the hours of operation. It was only when City Council required the staff to reconsider the hours of operation that the recommendation for the reduced hours of operation that appear in By-law was passed.
[10] According to the applicant, the reduction of permissible hours of operation has had a devastating effect on Goodmark’s business, significantly reducing the income of the seven employees and the owner Ilana Adamovich.
[11] The City argues that s. 82 of the Municipal Statute Law Amendment Act, 2006, S.O. 2006, c. 32, Sch. A. repealed the sunset provision found in s. 150(13) of the Municipal Act, 2001. The City argues that s. 82 of the Municipal Statute Law Amendment Act is a complete defence to the applicant’s sunset clause argument. Effective January 1, 2007, the transition provisions of the City of Toronto Act, 2006, S.O. 2006, c. 11 validated existing by-laws but without any five-year sunset clause.
[12] With respect to the applicant’s alternative arguments, the City argues that there is ample evidence that there were valid concerns about both licensed and unlicensed body rub parlours. This evidence justifies City Council’s decision to limit these facilities’ hours of operation in the By-law, in accordance with its civic obligations.
[13] In any event, it is the City’s position that it is not the role of this court to second guess City Council’s decisions or to review the underpinning factual foundation for their decisions. This court’s jurisdiction is limited to intervention only if a by-law is illegal.
The Issues
[14] The following issues arise:
• Does the five-year sunset clause in s. 150(13) of the Municipal Act, 2001 apply in light of s. 82 of the Municipal Statute Law Amendment Act, 2006 and the City of Toronto Act, 2006, both effective January 1, 2007?
• Has the applicant met the onus of proving that the By-law was not legally enacted for its stated purpose of nuisance control?
• Did City Council improperly consider the activities of both licensed and unlicensed businesses when enacting the By-law when the primary concern was unlicensed body rub parlours?
Jurisdiction of this Court
[15] A judge of the Superior Court of Justice may strike a municipal by-law in whole or in part for illegality, in accordance with s. 214(1) of the City of Toronto Act, 2006. This jurisdiction is limited. Section 213 of the City of Toronto Act, 2006 confirms that any by-law passed by a City in good faith under any Act shall not be quashed or open for review by any court because of the unreasonableness or the supposed unreasonableness of the by-law.
[16] Section 6(1) of the City of Toronto Act, 2006 confirms that the City’s powers shall be interpreted “to confer broad authority on the City to enable the City to govern its affairs as it considers appropriate and to enhance the City’s ability to respond to municipal issues.” Further, s. 6(2) confirms that, in case of ambiguity about whether or not the City has authority to act, the ambiguity “shall be resolved so as to include, rather than exclude, powers the City had on the day before this section came into force.”
The Facts
[17] The applicant relies on Ms. Adamovich’s affidavit and cross-examination as evidence, along with the documents in the compendium. The City relies on Frank Weinstock’s affidavit and cross-examination, as well as the documents in the compendium. Mr. Weinstock was the City’s Manager of the Policy and Business Planning Services Unit at the time the by-laws were passed.
[18] In 2002, the Master By-law added Chapter 545 to the City of Toronto Municipal Code to regulate some 42 businesses including taxis, tow trucks, and restaurants. Body rub parlours are in the business of non-therapeutic relaxation massage.
[19] Article XXXI of Chapter 545 applies to both licensed and unlicensed body rub parlours and is under the umbrella of the Master By-law.
[20] A Notice of Motion dated March 7, 2005 triggered the legislative process before City Council to review the licensing provisions related to body rub parlours after a stabbing occurred outside a licensed body rub parlour at 3633 Dundas Street West near a residential neighbourhood. The motion confirms that “many neighbourhoods across the City are becoming increasingly concerned about these types of operations, in terms of the types of activities that take place on their premises, and also the types of criminal elements that they attract.”
[21] City Council adopted the motion raising the concern and requested a staff report on the issue. City Council’s review of the licensing provisions for body rub parlours in 2005 was part of a broader strategy to deal with the increase of illegal body rub activity taking place in licensed holistic businesses.
[22] The initial staff report dated June 20, 2005 came before the Planning and Transportation Committee (the “Committee”) on June 27, 2005 and before City Council on July 19, 20, 21, and 26, 2005. The initial staff report contained various recommendations but did not recommend reducing hours of operation for licensed and unlicensed body rub parlours. City Council discussed the issues at some length. City Council members requested another staff report to consider appropriate guidelines for reducing the hours of operation for body rub parlours.
[23] The second staff report dated October 14, 2005 recommended reduced hours of operation for body rub parlours, as reflected in the By-law.
[24] The Committee considered the second staff report on November 7, 2005. Affected parties received notice of the Committee meeting in accordance with City Council procedural by-laws. No one involved in the licensed body rub business attended the meeting. The applicant does not raise the issue of lack of appropriate notice of the November 7, 2005 Committee meeting.
[25] City Council considered the matter again on December 5, 6, and 7, 2005. City Council also considered a separate report that recommended reducing holistic centre hours of operation to regulate unlicensed body rub activity. City Council accepted the report and passed a by-law confirming the same limited hours of operation for holistic centres as for licensed body rub parlours.
[26] On July 25, 26, and 27, 2006, City Council reopened the issue of body rub parlour operating hours in response to submissions made by licensed body rub parlours. City Council agreed to suspend the operation of the By-law and revert to the prior allowable hours of operation pending hearing submissions.
[27] The issue was referred back to the Committee for another meeting to hear representations from licensed body rub parlours. At the Committee meeting held September 5, 2006, several individuals involved in the licensed body rub business attended with counsel to make submissions.
[28] As well, counsel for the Emery Village Business Improvement Area (the “BIA”) in Etobicoke provided written submissions opposing an increase in the hours of operation for licensed body rub parlours. The BIA is home to five of the twenty-five licensed body rub parlours in Toronto. The BIA’s counsel filed a letter strongly asserting that limiting body rub parlour operating hours was an essential first step to control the known, self-evident nuisance within the BIA boundaries. The BIA’s submissions state the following:
The presence of these Parlours and the actions of their employers, owners and patrons constitute a clear nuisance which continually hurts the character of the Emery Village Community. As a result, the areas near these Body Rub Parlours remain less desirable places to start new businesses or new families.
[29] After hearing submissions, the Committee rejected the request made by licensed body rub parlours to expand hours of operation. The Committee reaffirmed the limited operating hours in the By-law.
[30] City Council reaffirmed the By-law on September 25, 2006.
[31] City Council members considered various material throughout the legislative process, including the following:
• On July 19, 20, 21, and 26, 2005, City Council considered Planning and Transportation Committee Report 6, Clause 6, headed “Licensing Strategy to Deal with Illegal Body Rub Activity in Licensed Premises.”
• On December 5, 6, and 7, 2005, City Council considered (i) Planning and Transportation Committee Report 10, Clause 6, headed “Proposed Amendments to the City of Toronto Municipal Code, Chapter 545, Licensing Regarding Hours of Operation for Body Rub Parlours” and (ii) Planning and Transportation Committee Report 10, Clause 7, headed “Proposed Amendments to the City of Toronto Municipal Code, Chapter 545, Licensing Regarding Hours of Operation for Holistic and Traditional Medicine Establishments.”
• On September 25, 26, and 27, 2006, City Council considered (i) the previously considered material, (ii) Planning and Transportation Committee Report 6, Clause 16, headed “Proposed Amendments to the City of Toronto Municipal Code, Chapter 545, Licensing Regarding Hours of Operation for Body Rub Parlours,” (iii) a confidential Fiscal Impact Statement (July 26, 2006) from the Deputy City Manager and Chief Financial Officer, and (iv) a report from the City Solicitor (September 21, 2006) on the results of the consultation with the BIA’s solicitor.
[32] The above material confirms that a primary concern was the increase in unlicensed body rub parlours masquerading as holistic centres. However, there were also concerns about licensed body rub parlours. The shooting that precipitated the initial motion was outside a licensed body rub parlour. As well, the BIA’s report confirmed that five licensed parlours operated business all hours of the night. BIA members consistently complained that the licensed parlours were a nuisance and detrimentally impacted their community. The BIA’s information is consistent with Committee deputations and debates. For example, at the Committee meeting on September 5, 2006, Councilor Milezyn identified four licensed body rub parlours in south Etobicoke that were subject to numerous ongoing complaints from nearby residents.
The argument that the sunset clause applies to the By-law and to the Master By-law
[33] The City enacted the By-law and the Master By-law with its authority under s. 150 of Part IV of the Municipal Act, 2001. Section 150(13) of the Municipal Act, 2001 stipulates that “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.”
[34] The Municipal Statute Law Amendment Act, 2006 came into force on January 1, 2007. Section 82 of the Municipal Statute Law Amendment Act, 2006 provides that “Part IV of the [Municipal Act, 2001] is repealed.” Section 82 provides substitute provisions outlining the City’s licensing powers. There is no sunset clause in the substitute provisions under s. 82.
[35] The City of Toronto Act, 2006 also came into force on January 1, 2007. Section 419 of the City of Toronto Act, 2006 provides the transition provisions for the Act. Section 419(4) states that if a by-law in effect immediately before January 1, 2007 was made under the Municipal Act, 2001, for which there is a “corresponding provision” in the City of Toronto Act, 2006, the by-law remains in effect and is deemed to have been made under the corresponding provisions of the City of Toronto Act, 2006. There is no sunset clause in the empowering provisions under the City of Toronto Act, 2006.
[36] The applicant argues that the sunset clause contained in s. 150(13) of the Municipal Act, 2001 applies to the By-law and to the Master By-law. Further, the City of Toronto Act, 2006 does not apply because it does not contain a “corresponding provision” to s. 150 of the Municipal Act, 2001. The transition provisions under s. 419 of the City of Toronto Act, 2006 are not engaged. Therefore, the applicant argues that, as the By-law became effective January 1, 2006, it expired on January 1, 2011. Similarly, the applicant argues that the Master By-law effective October 31, 2002 expired on October 31, 2007.
[37] I find that there is no merit to this argument.
[38] Section 8(2) of the City of Toronto Act, 2006 provides as follows:
The City may pass by-laws respecting the following matters:
Governance structure of the City and its local boards (restricted definition).
Accountability and transparency of the City and its operations and of its local boards (restricted definition) and their operations.
Financial management of the City and its local boards (restricted definition).
Public assets of the City acquired for the purpose of exercising its authority under this or any other Act.
Economic, social and environmental well-being of the City.
Health, safety and well-being of persons.
Services and things that the City is authorized to provide under subsection (1).
Protection of persons and property, including consumer protection.
Animals.
Structures, including fences and signs.
Business licensing.
[39] The applicant argues that s. 8(2) of the City of Toronto Act, 2006 is not a “corresponding provision” to s. 150(2) of the Municipal Act, 2001. Section 150(2) of the Municipal Act, 2001 limited the City’s licensing powers to three purposes: health and safety, nuisance control, and consumer protection. The applicant argues that s. 8(2) of the City of Toronto Act, 2006 does not include nuisance control as a ground for municipal intervention, and therefore, s. 8(2) is not a “corresponding provision” to the empowering provisions under the Municipal Act, 2001.
[40] I do not accept the applicant’s position. Section 8(2) of the City of Toronto Act, 2006 enhances and broadens City Council’s authority for civic intervention. Section 8(2) provides a flexible comprehensive framework for municipal by-laws. These broad powers implicitly include authority to pass by-laws in relation to the former nuisance framework under the Municipal Act, 2001, even though s. 8(2) does not specifically use the word “nuisance.”
[41] I accept the City’s position that the transition provisions in s. 419 of the City of Toronto Act, 2006 apply. I find that the empowering provisions in s. 8(2) of the City of Toronto Act, 2006 constitute “corresponding provisions” to those found in the Municipal Act, 2001.
[42] The applicant’s suggestion that the Municipal Act, 2001 should apply despite the passage of the City of Toronto Act, 2006 is contrary to the Court of Appeal’s clear directions in Toronto Livery Assn. v. Toronto (City), 2009 ONCA 535, 253 O.A.C. 56, at paras. 8-12 and 32. The court concluded in Livery that the validity of a Toronto by-law regulating business enacted under the Municipal Act, 2001 should be determined by reference to the City of Toronto Act, 2006. This statutory interpretation was confirmed by the transition provisions in the City of Toronto Act, 2006, its interpretive provisions, and its significantly broadened regulatory authority provisions. Cronk J.A. confirms that the concurrent application of two separate statutory regimes (the Municipal Act, 2001 and the City of Toronto Act, 2006) would cause confusion, uncertainty, and inconsistency in defining the City’s jurisdiction over a host of businesses. I adopt her cogent reasoning.
[43] There is no merit to the applicant’s argument that the sunset clause found in s. 150(13) of the Municipal Act, 2001 continues to apply. Section 82 of the Municipal Statute Law Amendment Act, 2006 repealed Part IV of the Municipal Act, 2001. Sections 419 and 8(2) of the City of Toronto Act, 2006 apply.
[44] I conclude that the By-law and the Master By-law have not expired. The request for a declaration that the By-law and the Master By-law are of no force and effect as they have expired is dismissed.
The argument that there was insufficient evidence of nuisance before City Council
[45] Municipal councils are legislative bodies charged with protecting the public. There is no requirement of proof of harm or proof of potential harm before City Council is empowered to enact a by-law. There is also no requirement that municipal council have “hard evidence” before passing a by-law; evidence may be impressionistic, rather than factual: see Adult Entertainment Assn. of Canada v. Ottawa (City), 2007 ONCA 389, 283 D.L.R. (4th) 704, at paras. 27-29.
[46] In any event, the evidence went far beyond impressionistic in this case. City Council considered a shooting outside a licensed body rub parlour that triggered concern about hours of operation. City Council also considered that at least five licensed body rub parlours caused complaints and concerns for neighbouring residents’ safety and quality of life. Further, City Council relied on staff reports that carefully considered the issue of the appropriate hours of operation.
[47] The applicant has not met the onus of proving that the By-law was illegal as it was not enacted for its stated purpose of nuisance control of both licensed and unlicensed body rub parlours.
[48] It is not the court’s role to second guess the municipal political process. In this case, I consider City Council’s actions to be entirely reasonable and a reflection of good municipal governance. However, what I think is irrelevant. As s. 213 of the City of Toronto Act, 2006 confirms, it is not for any court to intervene if a by-law is supposedly unreasonable or in fact unreasonable. This court may intervene only if a by-law is illegal. City councilors in this case responsibly fulfilled their civic duties in accordance with the governing legislation to balance competing interests in the interests of the public, and their decisions are not subject to review by this court.
The argument that City Council cannot regulate both licensed and unlicensed body rub parlours
[49] The applicant suggested that it was not appropriate for City Council to regulate both unlicensed and licensed body rub parlours as the real focus of concern was the rapid expansion of unlicensed body rub parlours.
[50] The City’s representative, who was cross-examined, confirmed that City Council’s concern was not limited to the mushrooming of unlicensed body rub parlours. There were concerns about licensed body rub parlours as well. In any event, it was entirely appropriate and within the ambit of City Council’s mandate to regulate both unlicensed and licensed body rub parlours. Further, the scope of City Council’s mandate is not properly within this court’s jurisdiction.
Disposition
[51] For these reasons, the application is dismissed.
Costs
[52] Counsel agreed that the successful party would be entitled to costs fixed in the amount of $10,000 plus HST inclusive of disbursements. Costs are therefore payable by the applicant forthwith to the City in this amount.
J. Wilson J.
Released: October 25, 2013
COURT FILE NO.: 06-CV-323637PD1
DATE: 20131025
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
1786889 Ontario Inc.
Applicant
– and –
City of Toronto
Respondent
REASONS FOR JUDGMENT
J. Wilson J.
Released: October 25, 2013