Toronto Taxi Alliance Inc. v. City of Toronto, 2015 ONSC 685
COURT FILE NO.: CV-14-502614
DATE: 20150130
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
TORONTO TAXI ALLIANCE INC.
Applicant
– and –
CITY OF TORONTO and TAXIWORKERS ASSOCIATION OF ONTARIO
Respondents
Michael I. Binetti and Fiona Campbell, for the Applicant
Ansuya Pachai, for the Respondent, City of Toronto
Peter Rosenthal and Renatta Austin, for the Respondent, Taxiworkers Association of Ontario
HEARD at Toronto: November 17, 18 and 19, 2014
REASONS FOR JUDGMENT
Stinson J.
[1] This case involves a dispute about changes made by Toronto City Council in February and June 2014 to the regime governing taxicab licensing in Toronto. The applicant asks the court to quash the by-laws by which those changes were made. The case raises issues about the process followed by the City in enacting the changes, including the sufficiency of the notice provided to affected parties, whether City Council adhered to its own procedural by-law, and whether the by-laws can be quashed on the ground of bad faith. It involves some questions of fact, and several legal issues, including the circumstances in which the courts will become engaged in reviewing legislative enactments of municipalities.
1) Overview and procedural history
[2] By way of resolutions passed by City Council in February 2014 and by-law amendments enacted in June 2014, the City of Toronto changed the taxi licensing system in Toronto from a two-tiered model to a one-tiered, owner-operated model. The former taxi licensing system included three forms of taxi owner licences: Standard Taxicab Owner Licences (“STL”), Ambassador Taxicab Owner Licences (“Ambassador”), and Accessible Taxicab Owner Licences (“Accessible”). Each of these licences had unique conditions attached to it. Most notable were the significant benefits attached to STLs, which included transferability and leasing, and thus the ability to sell a licence or to earn income from lessee drivers. By contrast, an owner of an Ambassador licence was required to drive his or her taxi full-time and could not lease, transfer or sell the licence. The Ambassador licence had been introduced in 1999, as an initial step towards an owner-operated licensing model. The Ambassador licence was not the panacea it was hoped to be, and pressures regarding further reforms to the Toronto taxi system continued over the ensuing decade.
[3] In this context, in 2011 the City began consultations with the taxicab industry that culminated in a staff report that recommended the creation of a single taxi licence – to be known as the Toronto Taxi Licence (“TTL”) that would eventually replace the former three licences. The TTL would have more favourable conditions attached to it than were attached to Ambassador licences, but would reduce some of the benefits attached to STLs. During the consultation process, Ambassador drivers and shift workers, represented on this application by the Taxiworkers Association of Ontario (“iTaxiworkers”), championed these changes. The applicant, Toronto Taxi Alliance (“TTA”), composed primarily of those who hold STLs, vigorously opposed the proposed new system.
[4] The consultation process was conducted under the auspices of a Standing Committee of Toronto City Council, the Licensing and Standards Committee (“L&SC”). At the end of the consultation, L&SC held a public hearing in January 2014 and received extensive oral and written submissions. At that meeting, the Committee approved a resolution, the effect of which was to refer the topic of implementation of the new TTL back to City staff for further study for another year, and to recommend to City Council that it implement some minor changes to the taxi licensing regime immediately.
[5] L&SC’s report on the consultation process, including its decision to refer the issue of implementation of the TTL for a further year’s study, was considered by City Council at its meeting on February 19, 2014. During the course of that meeting, despite the decision of L&SC to refer the issue of implementation of the TTL for further study, Council passed resolutions providing for the implementation of the TTL regime as of July 1, 2014, and for the mandatory conversion of all STLs to TTLs by June 30, 2024.
[6] The February resolutions of Council were, in due course, converted by City legal staff into formal by-law amendments. The amendments were enacted by Council at its meeting on June 13, 2014, to take effect on July 1, 2014.
[7] On April 22, 2014, TTA commenced this application under s. 214 of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A (“COTA”) seeking to quash the February 11, 2014 resolutions (and, ultimately, the June 13, 2014 by-law amendments) on the ground that the City failed to give proper notice regarding its intention to enact the changes, failed to follow its own procedural rules, and acted in bad faith. In this proceeding, TTA brought a motion for interlocutory injunction to restrain the City from implementing the changes. That motion was heard by me on June 25, 2014. It was resolved by consent of the parties with an order that enjoined the City of Toronto from acting upon or implementing certain sections of By-law 503-2014 as they applied to STL holders until the final adjudication of the application. The result was that STL holders were still able to sell their STLs without requiring them to be converted to TTLs immediately upon sale, as the amended by-law would otherwise require. The order also stated that it conferred no rights that would entitle a party who acquires an STL after June 30, 2014 to be treated as if they had been an STL holder prior to July 1, 2014.
[8] The TTA application initially named only the City as a respondent. At the time the injunction motion was heard, iTaxiworkers sought to intervene and was granted party status. Following the full exchange of materials by all parties and cross-examinations, the application was heard by me over a three day period in mid-November 2014.
[9] For the reasons that follow, I conclude that the resolution of City Council and the consequent by-law amendment providing for a mandatory deadline for the conversion of all taxi licences to TTLs were illegally passed. I would therefore quash that resolution and that portion of the by-law. The remainder of the TTL regime was, in my view, validly enacted. I would therefore refuse the remainder of the relief sought.
2) History of THE Toronto Taxi Licensing Scheme
[10] Before 1998, all taxicab licences in Toronto were STLs. Since at least 1963, STL holders have been permitted to sell their licences at market value. Since 1974, those who hold STLs have not been required to drive their own cars, and often lease their licences to brokerages and fleet services, which in turn employ shift drivers. The average monthly income paid to the holder of an STL for the lease of an STL is around $1,350. The market value of an STL, given the perquisites attached to it, has been as high as $200,000.
[11] In 1998, a comprehensive review of the taxi licensing system conducted by the City disclosed significant issues, including the prevalence of middlemen, absentee owners and passive investors, which were said to have caused deterioration in the condition of vehicles and in the quality of customer service. There were also concerns about poor working conditions and low wages for many non-owner drivers. In response, City Council implemented by-laws that created a new class of owner-operated taxicabs (Ambassadors), ended multiple leasing of taxicabs, and mandated that only licensed taxicab drivers could purchase taxicabs. The City also stopped issuing STLs. The only way to obtain an STL now is to purchase one from a current owner. Since 2005, the transferee must also be a licenced taxi driver and can only own one STL.
[12] Despite the 1998 changes, aimed at increasing the direct involvement of licence owners in the taxicab industry, there remained significant absenteeism. In 2012, 75% of STL taxis were operated by an agent and/or lessee. Moreover, while the Ambassador licence did improve the quality of taxicab service and increased the incomes of many drivers, shortcomings remained: long hours resulting from the requirement that only Ambassador owners could drive their own cabs; non-transferability of licences such that drivers felt they could not retire; and inequity between STLs and Ambassadors. The City recognized that further changes were necessary.
3) 2011-14 Studies, Consultations and Reports
[13] The City began a further intensive review of the taxi licensing system in May 2011, when L&SC was tasked by Council with undertaking studies and consultations and eventually producing a report for Council’s action. Between May 2011 and February 2013, L&SC maintained a publicly accessible website which included most of the documents and information respecting the consultations and the legislative process. L&SC also held 40 consultations and 100 smaller meetings and received approximately 6,000 completed surveys, 900 emails and 600 online comment forms, and 120 voicemail messages. It also received 17 “Long Submissions,” which were publicly available on City’s Taxi Review website. Along the way, City staff working for L&SC prepared several public reports, of which three are significant:
(a) Taxi-Cab Industry Review: Preliminary Findings (September 7, 2012)
[14] This report sought to define the scope and format for the review of the taxi licensing system, and to identity the issues requiring consideration. Emerging issues included the number of taxicabs, accessibility, fares, licence structures, standardized vehicles, and safety and technology. In relation to licensing, the most common suggestion at this stage was that one type of taxicab licence be created.
(b) Taxi-Cab Industry Review: Framework Report (June 27, 2013) (the “Framework Report”)
[15] The Framework Report contained 44 recommendations. It identified a long-term goal of 100% accessible taxicabs, with a short-term goal of doubling the number of wheelchair accessible taxicabs in Toronto by 2014. It was also the first report to suggest that all existing licences be harmonized to the TTL, which would be a transferable licence that must be driven full time by its owner, but could also be rented out to other drivers for a second shift. It would require all licence-holders to have accessible vehicles. This report contemplated that the City would harmonize all licences “over time” and that this transition would happen by sale of existing licences. Notably, it proposed January 1, 2014 as the commencement date for the mandatory transition to TTL upon sale of an STL, and anticipated that all licences would likely be converted to TTLs through sale by 2050, assuming a rate of 100 sales and transfers per year. Apart from the requirement for automatic transition to a TTL upon the sale of an STL, the Framework Report neither recommended nor mentioned a deadline for the mandatory conversion of all remaining STLs to TTLs. It did, however, mention that “the City is currently evaluating options to expedite the process of transitioning [STLs] to the TTL.”
[16] After the Framework Report was released, L&SC sought more input from industry stakeholders. It held consultations, provided an online survey, and accepted position papers. The Executive Director of L&SC met with TTA representatives to discuss their responses to the Framework Report. In this meeting, the TTA expressed considerable concern about and opposition to the proposals in the Framework Report.
(c) Taxi-Cab Industry Review – Final Report (January 8, 2014) (the “Final Staff Report”)
[17] The Final Staff Report contained 40 recommendations, the first 10 of which related to the institution of the new TTL. Some key characteristics of the TTL included:
(a) A TTL owner must drive his or her taxicab for a minimum of 167 hours within one calendar month;
(b) A TTL owner must be affiliated with a licenced brokerage;
(c) A TTL owner may, in addition, rent his or her taxicab, on a shift basis only, to a maximum of three licenced drivers who have passed the City of Toronto approved course;
(d) A TTL owner may sell his or her taxicab and it equipment after meeting the minimum driving requirement for two consecutive years, to an individual (not a corporation); and
(e) A TTL requires the operation of a wheelchair accessible vehicle.
[18] The Final Staff Report recommended that current Ambassador and Accessible Licence holders be able to surrender their current licences voluntarily and be issued TTL licences effective July 1, 2014. It also recommended that any STL sold after January 1, 2019 would, upon sale, convert to a TTL. Finally, it endorsed the goal that 6% of all taxis (290 vehicles) be accessible by 2015.
[19] Notably, and consistent with the Framework Report, the Final Staff Report said nothing about a mandatory conversion date by which all STL licence holders would have to convert their licences to TTLs.
4) January 23, 2014 Licensing & Standards Committee Meeting
[20] L&SC met on January 23, 2014 to discuss the Final Staff Report. Public notice of the meeting was given on January 15, 2014. This notice included all 40 recommendations in the Final Staff Report. At the meeting, over 700 deputations were made by stakeholders in the taxi industry. The meeting lasted 13 hours.
[21] The TTA submitted a written deputation for the meeting, in which it opposed the creation of a new TTL plate and endorsed the conversion of Ambassador licences into STLs. The TTA argued that the TTL would make retirement more onerous and would adversely affect families and estate planning since it would erode the intrinsic value of an STL. The TTA further argued that the goal of 100% wheelchair accessibility would create an unreasonable threshold for a non-existent demand.
[22] At the L&SC meeting, a letter was presented from Deputy Mayor Kelly in which he expressed his opinion that “many large questions remain unanswered, some of which relate to the Provincial regulations which appear to limit the city’s authority to establish a fee for new licences above the level of cost recovery.” He proposed that Recommendations 1 to 10 of the Final Staff Report, which contained the substance of the TTL regime, be referred “back to staff,” with another report to be given to L&SC in February 2015.
[23] L&SC voted 3-2 to accept Deputy Mayor Kelly’s proposal, and so Recommendations 1 to 10 (the “Referred Recommendations”) were sent “back to staff.” The rest of the recommendations from the Final Staff Report, which were largely non-controversial, were approved by L&SC (the “Approved Recommendations”). The results of the L&SC meeting were documented in a report to City Council.
5) February 19, 2014 City Council Meeting
[24] The next City Council meeting was scheduled to take place on February 19, 2014. The agenda for that meeting was made public on February 15, 2014, and stated that Council would consider Agenda Item LS26.1 entitled “The Taxicab Industry Review – Final Report.” The published agenda included the complete report of L≻ it first reproduced the Approved Recommendations and thereafter reproduced in full the Referred Recommendations, prefaced by a note that L&SC had referred them back to staff for reporting in February 2015.
[25] During the February 19, 2014 meeting, there was significant debate on the entire Final Staff Report, including the Referred Recommendations. A number of councillors expressed concerns about the delay that would result from waiting until February 2015 for a further staff report. Councillors also discussed the current inequities of the system, the desire to pursue 100% accessible taxicabs, and the length and extent of the consultations thus far. During the course of the Council meeting, three resolutions were approved, as follows:
(a) a motion to amend the “Referred Recommendations” back into the L&SC Report (31 for, 12 against, and 2 absent – a 68% majority);
(b) a motion to change the date at which STLs would convert to TTLs upon sale from January 1, 2019 to July 1, 2014 (28 for, 15 against, and 2 absent - a 62% majority);
(c) a motion to require all taxi licences be converted to TTLs by June 30, 2024 (30 votes for, 12 against, and 2 absent – a 66% majority).
[26] Council also adopted a resolution authorizing staff to prepare by-laws to change the taxicab licensing system by-laws in the ways contemplated by the Final Staff Report, as amended by Council.
[27] During the course of the debate, a point of order was raised about whether it was procedurally proper for the Referred Recommendations to be voted on by Council without a formal two-thirds vote, since they had been referred back to staff by L&SC. The Chair of the meeting sought advice on this point from the City Clerk. According to the transcript of the meeting, a representative of the Office of the City Clerk, John Elvidge, responded as follows:
This item was considered at the Licensing and Standards Committee and the Committee referred a portion of the items to Staff and recommended the balance with some amendments and they form the Committee’s recommendations that were introduced this morning when the Chair introduced the report. The motions that were referred were referred, but it’s also true that Council is free to move those items because the entire item is before you.
There was no formal ruling by the Chair of the meeting on this point of order, and the votes described above were conducted.
6) By-laws as enacted and their effect
[28] On June 13, 2014, City Council adopted Bills 542 and 543 amending Chapter 545 of the Toronto Municipal Code and implementing the February 19, 2014 resolutions. By their terms, these amendments to the taxi licensing by-law came into effect 18 days later, on July 1, 2014.
[29] The effect of the amendments to the by-law as enacted is to make it possible for Ambassador and Accessible licence holders to apply immediately for conversion of their licences to TTLs. Current STL holders may do so as well, or they can keep their STLs and attendant benefits until June 30, 2024, at which time they will be required to convert their STLs into TTLs. If STL holders choose to sell their STLs before June 30, 2024, they will automatically convert to TTLs upon sale.
[30] Because any TTL licence holder must have an accessible vehicle, those Ambassador licence holders who wish to convert their licences must acquire a new vehicle if their existing taxicab is not accessible. Similarly, where an STL licence holder sells his or her licence the purchaser must have an accessible taxicab.
7) jurisdiction and Positions of Parties
[31] On this application TTA seeks to quash the resolutions and by-law amendments by which the TTL regime was enacted, on the grounds of illegality arising from procedural unfairness and bad faith. Sections 213 and 214(1) of COTA provide as follows:
A by-law of the City or a local board of the City passed in good faith under any Act shall not be quashed or open to review in whole or in part by any court because of the unreasonableness or supposed unreasonableness of the by-law.
(1) Upon the application of any person, the Superior Court of Justice may quash a by-law, order or resolution of the City or a local board of the City in whole or in part for illegality.
[32] As developed in their oral submissions before me, the parties’ arguments may be summarized as follows:
a) TTA
[33] TTA submits that certain parts of the resolutions and by-law amendments relating to the TTL should be quashed for illegality pursuant to s. 214(1) of COTA. TTA argues that (1) no proper notice was given that the TTL regime would be considered at the February 19, 2014 Council meeting, and the Referred Recommendations concerning the TTL were improperly brought before Council; (2) both the amendment to the start-date for the conversion of STLs to TTLs upon sale and the amendment imposing an end date of June 30, 2024 were improper and arbitrary; and (3) the by-law amendments should be quashed for illegality because the procedural breaches were more than merely technical and are tantamount to bad faith.
b) The City
[34] The City emphasizes that the court must give significant deference to legislative decisions made by a municipal body. The City also submits that proper notice was given that the Referred Recommendations would be before Council at its meeting on February 19 by reason of their inclusion in the published agenda. The City argues that the court must also give deference to the City’s interpretation of its own procedural by-laws, which are distinguishable from statutorily mandated procedures. The procedure followed at the February 19 meeting was entirely in keeping with its past practices. Further, the contents of the Council debate illustrate no arbitrariness or bad faith in Council’s decision to focus on and amend the Referred Recommendations. As a consequence, there is no basis for quashing the impugned resolutions or by-law amendments.
c) iTaxiworkers
[35] iTaxiworkers shares many of the City’s positions. It argues that those in the industry were well aware that the Referred Recommendations would be considered by City Council at the February 19 meeting. It also disputes the allegations that Council acted arbitrarily in implementing the TTL and amending the start and end dates as it did. In support of this, iTaxiworkers brought to the Court’s attention the significant debate on the Council floor and the Councillors’ evident concerns about the interests of low income taxi-drivers and increasing the number of accessible taxicabs in the city.
8) Issues
[36] Based on the submissions of the parties and their respective positions, the issues on this application may be distilled into the following:
(1) Did the City have an obligation of procedural fairness that required it to provide notice of its intention to approve the TTL regime at its February 19, 2014 Council meeting?
(2) Did the City breach its Procedural By-law by:
(a) failing to provide proper notice of its intention to enact the TTL regime? or
(b) treating the Referred Recommendations as before Council?
(3) What is the effect of any breaches of the City’s Procedural By-law on the legality of the amendments to the taxi licensing by-law?
(4) Should the amendments to the taxi licensing by-law be quashed on the ground of bad faith?
9) The city’s legislative procedures
[37] Before undertaking my analysis of the issues, I briefly summarize the relevant aspects of the regime that governs the enactment of by-laws by the City of Toronto.
[38] Subsection 189(2) of COTA requires the City to enact a procedural by-law respecting Council meetings. It states:
The City and every local board of the City shall pass a procedure by-law for governing the calling, place and proceedings of meetings.
The City’s procedural by-law is found in Chapter 27 of the Toronto Municipal Code, entitled “Council Procedures” (the “Procedural By-law”).
[39] Within City Council, there are seven Standing Committees. When an issue or topic that may become the subject of a new by-law or a by-law amendment, that issue is often referred to the relevant Committee, where staff takes the lead on engaging in public consultation and research. Staff then reports to the Committee.
[40] The Procedural By-law addresses the relationship between Committees and Council and specifically outlines how a Committee’s report comes before Council for action. Each time a Committee considers a staff report, whether final or interim, it solicits public deputations. It then makes decisions or recommendations on that report, by way of motions or resolutions passed by the Committee. In turn, the Committee’s report and recommendations are considered at a City Council meeting, and Council has the final word on the actions to be taken on the basis of those recommendations. Council does not hear any public deputations at its meetings before voting on a Committee report.
[41] Section 27-55 of the Procedural By-law requires that public notice be provided in advance of any motion being made at Council. This notice is accomplished through publication of the motion in the agenda that is released prior to the Council meeting. When a Committee’s recommendations in its report are going to be considered at a Council meeting, they appear on the Council agenda and are considered the “main motions” for Council to consider at that meeting. This provision is found in §27-70 of the Procedural By-law, which states:
A committee’s recommendations in their report to Council are the main motions for Council to debate and:
A. Must be introduced in accordance with §27-55;
B. Are considered moved when they are announced; and
C. Are considered adopted without amendment by consent, unless Council decides otherwise.
[42] As “main motions,” a Committee’s recommendations in its report to Council are properly subject to motions to amend by councillors, which motions do not need to be published in the agenda. The relevant section of the Procedural By-law is §27-73, which reads as follows:
A. Effect of a motion to amend.
A motion to amend has the effect of varying the main motion.
B. The content of an amendment.
An amendment must relate to the main motion, and cannot propose:
(1) A contrary action to the motion it is proposing to amend; or
(2) A new or changed City policy unless the subject of the proposed policy is the main motion’s subject.
C. Boundaries on the relationship of an amendment to its motion.
(1) An amendment may propose that a different or additional action be taken on the subject matter of the main motion provided it is directly relevant to the main motion.
(2) An amendment is out of order if it is a substantive motion on other business beyond the subject matter of the main motion.
[43] Committees do not always report to Council. If at any time Council wants to remove an item from consideration by a Committee that has not reported to Council, Council can do this by way of a special motion with notice, which must receive a two-thirds vote at Council meeting. This requirement is found in §27-60.
[44] In §27-6, the Procedural By-law specifically allows the Chair of Council to use previous practices of the Council and Robert’s Rules of Order as interpretive tools when applying the Procedural By-law and making procedural rulings at Council meetings.
10) Analysis
[45] As a general rule, courts must show deference to municipalities and should be reluctant to interfere with the decisions of municipal governments that address matters within their jurisdiction: Howard v. Toronto (City) (1928), 1928 CanLII 427 (ON CA), 61 O.L.R. 563, [1928] 1 D.L.R. 952 (C.A.); Shell Canada Products Ltd. v. Vancouver (City), 1994 CanLII 115 (SCC), [1994] 1 S.C.R. 231 per McLachlin C. J. in dissent; Equity Waste Management of Canada v. Panorama Investment Group (1997), 1997 CanLII 2742 (ON CA), 35 O.R. (3d) 321 (C.A.); Nanaimo (City) v. Rascal Trucking Ltd., 2000 SCC 13, [2000] 1 S.C.R. 342.
[46] A municipal council is ultimately vested with authority to interpret its own by-laws and control its own processes. As the Supreme Court wrote in Nanaimo (at para 35):
Municipal councillors are elected by the constituents they represent and as such are more conversant with the exigencies of their community than are the courts. The fact that municipal councils are elected representatives of their community, and accountable to their constituents, is relevant in scrutinizing intra vires decisions. The reality that municipalities often balance complex and divergent interests in arriving at decisions in the public interest is of similar importance. In short, these considerations warrant that the intra vires decision of municipalities be reviewed upon a deferential standard.
[47] Against the backdrop of the foregoing principles, I turn to a discussion of the issues arising from TTA’s arguments that the court should intervene in this case.
Issue 1 – Did the City have an obligation of procedural fairness that required it to provide notice of its intention to approve the TTL regime at its February 19, 2014 Council meeting?
[48] It is well established that a municipal council acting legislatively does not have a common law duty of procedural fairness to parties who may be affected by its actions: Reference Re Canada Assistance Plan (B.C.), 1991 CanLII 74 (SCC), [1991] 2 S.C.R. 525, at para. 60; Homex Realty and Development Co. v. Wyoming (Village), 1980 CanLII 55 (SCC), [1980] 2 S.C.R. 1011; Canada (Attorney General) v. Inuit Tapirisat of Canada, 1980 CanLII 21 (SCC), [1980] 2 S.C.R. 735. By contrast, when a municipality makes an administrative decision affecting individual rights and interests, it will be bound by a duty of procedural fairness: Congrégation des témoins de Jéhovah de St-Jérôme-Lafontaine v. Lafontaine (Village), 2004 SCC 48, [2004] 2 S.C.R. 650, at para. 3. The question thus becomes whether, when making the changes to the taxi licensing regime, City Council was exercising a legislative or an administrative function.
[49] The distinction between legislative and administrative action has been characterized as the difference between general and particular. “A legislative act is the creation and promulgation of a general rule of conduct without reference to particular cases; an administrative act cannot be exactly defined, but it includes the adoption of a policy, the making and issue of a specific direction, and the application of a general rule to a particular case in accordance with the requirements of policy or expediency or administrative practice.” See S.A. De Smith, Judicial Review of Administrative Action, 3d ed. (London: Stevens, 1973) at p. 60, cited with approval in Potter v. Halifax Regional School Board, 2002 NSCA 88, 215 D.L.R. (4th) 441, at para. 39.
[50] In our case, City Council passed a by-law overhauling the taxi licensing regime. This by-law was general in nature, affecting every person who sought or held a taxi licence. The intention of the by-law was to address industry-specific concerns as well as general public safety and accessibility. The by-law was not an instance of the City adjudicating between two individuals with competing interests, nor was it specifically designed to target the rights or property of an individual person, such as in some zoning decisions or individual licensing decisions. It follows that the City was not acting administratively or quasi-judicially when it adopted the TTL recommendations or passed the by-law amendments. As McLachlin C. J. wrote in Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5, at para. 19: “[m]unicipal councillors passing bylaws fulfill a task that affects their community as a whole and is legislative rather than adjudicative in nature. Bylaws are not quasi-judicial decisions. Rather, they involve an array of social, economic, political and other non-legal considerations.”
[51] I therefore conclude that in this instance the City had no common law duty of procedural fairness to provide notice. Any notice requirements must be found either in the legislation governing City Council’s actions, or its procedural by-laws. TTA’s argument on this issue fails accordingly.
Issue 2(a) - Did the City breach its Procedural By-law by failing to provide proper notice of its intention to enact the TTL regime?
[52] TTA submits that the City failed to provide proper notice that the TTL regime would be considered at the February 19, 2014 City Council meeting, as required by the Procedural By-law. Since proper notice was not provided, the argument continues, unless Council complied with certain additional procedural requirements (which it did not), it lacked authority to deal with the TTL regime at that meeting.
[53] As recited above, the topic of potential reforms to the Toronto taxi licensing regime was the subject of extensive study and consultation over the period 2011 to 2014. TTA does not dispute that it was aware of and participated in that consultation process. Indeed, at various stages, TTA’s input was specifically sought out by City staff.
[54] TTA’s complaint respecting notice is founded upon the events that transpired at and after the L&SC meeting on January 23, 2014. It argues that a member of the public who attended the January 23 meeting would have come away with the understanding that the Referred Recommendations (and thus the TTL proposal) were to be the subject of additional study and were not to come back for consideration until February 2015. The fact that these 10 items had been referred, and only the Approved Recommendations from the Final Staff Report had been properly approved by L&SC and recommended to Council, the submission continues, signified that Council would not be considering the Referred Recommendations at the upcoming February 19, 2014 City Council meeting.
[55] The City and iTaxiworkers dispute TTA’s allegations regarding lack of notice that the TTL regime would be before City Council at the February 19 meeting. They point to what they say is the known and established practice of City Council to deal with all aspects of a Committee report, and not just those that are specifically recommended. They note that the agenda for the February 19, 2014 City Council meeting was made public on Thursday, February 13, 2014; it listed as the first item of business “LS26.1 – The Taxicab Industry Review – Final Report” and appended the complete report of the L&SC meeting of January 23, 2014, which included the full text of the Referred Recommendations. On the basis of the foregoing, the respondents assert, the City discharged its duty to provide notice that the TTL would be a matter under consideration at the February 19 Council meeting. They therefore dispute TTA’s assertion that it was unaware and taken by surprise that the TTL would be discussed at the February 19 meeting.
[56] I begin my analysis of this issue with an examination of the established practices of City Council when dealing with Committee reports.
[57] The evidence filed by the City included the affidavit of Mr. Elvidge, who is the Director of the Secretariat of the City Clerk’s office, a position he has held since early 2007. He has been employed by the City and its predecessor the Municipality of Metropolitan Toronto, since 1990 in various positions. In his current capacity, he assists in the conduct of City Council meetings on behalf of the City Clerk’s office, including preparing agendas, posting notices when necessary, and taking minutes and keeping a record of City Council proceedings and decisions.
[58] Mr. Elvidge gave specific evidence regarding the City’s practice in relation to how Committee reports are placed on the agenda for regular meetings of City Council, as follows:
As it pertains to Committee Reports to City Council, the City’s current practice, which was adopted in 2006, is that Committees do not have to report to City Council when there is nothing in the Committee’s decision which requires City Council approval to take effect. For example, when the only action taken by a Standing Committee is to refer or defer the matter in its entirety, that would not be [sic] form part of the Committee’s Report to City Council because the Committee has not made any decisions which require City Council approval to take effect. Accordingly, the practice of the City Clerk’s office is not to place that on City Council’s agenda. ...
If any Councillor wishes to bring before City Council a matter which is not on the Council agenda because it is been referred or deferred by the Committee, the City’s practice is that that is done by way of a motion to remove the matter from the Committee’s jurisdiction.…
If, however, the Committee takes any action which requires City Council approval to take effect, for example, by adopting, amending or receiving any of the recommendations contained in the matter, the City’s practice is that the Committee must report to City Council. Accordingly, the City Clerk’s office considers all such matters to be part of the Committee’s report to City Council and it places them on City Council’s agenda.
The formal mechanism used by City Council to have Committee Reports on the Council agenda brought before City Council for debate is by motions made by the Committee Chairs to introduce the Committee Reports. City Council’s practice is that these motions to introduce are made at the start of each meeting. Once a Committee Report has been introduced, City Council’s practice is to treat the entire matter as being before it for consideration and decision by way of majority vote.
[59] The foregoing practice was followed in relation to the L&SC report arising from its January 23, 2014 meeting: it was placed on the agenda for the February 19 meeting as Agenda Item LS26.1. In light of the foregoing, in my view, it should have been apparent to anyone accustomed to dealing with matters coming before City Council that the entire matter of the Final Staff Report – and not just the Approved Recommendations – would be before City Council for consideration at the February 19, 2014 meeting.
[60] There is additional evidence that confirms this point. For example, during the course of the debate on February 19, 2014, no City Councillor raised an issue regarding the propriety of the Referred Recommendations being considered by Council at that meeting. The sole procedural issue raised was whether a two-thirds majority vote would be required. The advice from the City Clerk’s office (from Mr. Elvidge himself) was that the entire matter was properly before Council and no two-thirds vote was required. No objection was taken to that advice nor were any other questions raised concerning the propriety of the Referred Recommendations being considered at the meeting.
[61] Indeed, at one stage of the debate, Deputy Mayor Kelly addressed the issue of the 10 Referred Recommendations, in terms that make it plain that he was conscious of the fact that they were part of the matter that City Council was considering. He spoke in favor of sending the Referred Recommendations to staff for further study (as had L&SC), and invited other councillors to join him in supporting that disposition. At no time did he suggest that the Referred Recommendations were outside the scope of proper consideration by City Council; indeed, it is implicit in his comments that he believed that they were.
[62] I recognize that the mere fact that members of City Council proceeded on the basis that they believed the Referred Recommendations were properly before them for consideration does not necessarily answer the legal question whether the City had complied with its own Procedural By-law. In my view, however, it is telling that, with the possible exception of the Councillor who raised the question about the possible need of a two-thirds majority vote, no one who spoke raised any issue on this point. This supports and confirms the evidence of Mr. Elvidge regarding the standard practice of City Council when dealing with Committee Reports that contain some approved and some referred recommendations.
[63] This takes me to the other evidence that bears on the question whether TTA was truly taken by surprise that the TTL regime came to be considered by City Council on February 19, 2014. According to the evidence of Joel Barr, the principal affiant on behalf of the applicant, it was his understanding “as was confirmed within the agenda for the Council meeting, that the only items for consideration by Council dealing with the Taxicab Industry Review at its meeting on February 19, 2014 were the 32 items, which the Committee had reviewed and recommended [the Approved Recommendations] and not those dealing with replacing STLs with TTLs [the Referred Recommendations].”
[64] Arguably, the affidavit of Mr. Barr is to some extent at variance with the contents of a letter issued by TTA on February 1, 2014, addressed to “Taxi Industry Members.” That letter stated, in part, as follows:
Your support of our lobbying efforts is starting to pay off. The L&S recommendations now go on to the full City Council. …
Our industry can win all of these benefits but we must act now. The recommendations will be debated by the full City Council. We are now working to convince a majority of councillors to support this plan. Please plan to attend the City Council meeting. Your presence will send a message of support.
The foregoing letter would suggest that the question whether or not to follow the L&SC recommendations was going to be the subject of debate at the February 19, 2014 meeting of City Council.
[65] The affidavit filed on behalf of iTaxiworkers from Sajid Mughal painted a different picture from the evidence of Mr. Barr. Mr. Mughal stated that he understood the implementation of the Referred Recommendations might well be considered at the Council meeting of February 19, as they were included in the agenda for the meeting. He further stated that large numbers of supporters of both the TTA and iTaxiworkers attended the February 19 Council meeting (as they had been encouraged to do by the TTA letter dated February 1, 2014). Supporters of TTA wore orange shirts and supporters of iTaxiworkers wore green shirts, expressing their views by the color of shirt they wore. Based on his participation in the review of the taxi industry from its inception in 2011 until its completion when the amending by-laws were enacted in June 2014, and his observations, Mr. Mughal concluded “that it was apparent to at least most interested stakeholders that all of the staff recommendations could be voted on at both the January 23 and the February 19 meetings. In particular, stakeholders on both sides appeared to be anxiously awaiting the February 19 disposition of all of the provisions that had been considered at the January 23 meeting, including those that the Committee had voted should be referred.” Mr. Mughal’s evidence in this regard is consistent with the established practice of City Council regarding its treatment of Committee reports that contain some recommendations and some items that have been referred.
[66] The potential outcome of the February 19, 2014 Council meeting was also discussed in an editorial in the February 2014 edition of Taxi News, a prominent industry newspaper. That editorial described the referral of the TTL recommendations back to staff as a “big victory” at the January 23 meeting. The editorial then went on to state:
Do not for one second think this is over. The next hurdle is for City Council to accept the L&S vote at its February meeting. The lobbying by all interested parties is ongoing and ferocious.
This evidence is consistent with Mr. Mughal’s evidence concerning the understanding of the various stakeholders.
[67] It is also telling, in my view, that lobbyists representing the interests of TTA and others allied with it in opposition to the implementation of the TTL continued to engage with members of City Council subsequent to the January 23 L&SC meeting. As I have noted, the Approved Recommendations were largely non-controversial, which would suggest there was no great need to engage in ongoing lobbying in relation to the taxi industry review process subsequent to the January 23 meeting. Put another way, the fact that such lobbying continued is entirely consistent with the understanding that the Referred Recommendations would be open for consideration at the February 19 Council meeting. Indeed, the lobbyist retained and instructed on behalf of TTA was himself a former City Councillor who, presumably, had direct experience in the procedural practices of City Council, and would have known as much.
[68] I further note that TTA and its associates are not novices when it comes to dealing with City Hall and City Council proceedings. Municipal regulation of the taxi industry in Toronto has been ongoing for decades and the reform process that culminated in the actions under attack itself dates back to the 1990s. Opponents of reforms to taxi regulation in Toronto have also had resort to the courts on several occasions in the past, most notably following the last licensing reform efforts: see Toronto Taxi Alliance Inc. v. Toronto (City) (2005), 2005 CanLII 47232 (ON CA), 77 O.R. (3d) 721 (C.A.), reversing Toronto Taxi Alliance Inc. v. Toronto (City) (2005), 2005 CanLII 2324 (ON SC), 74 O.R. (3d) 447 (S.C.). TTA and other opponents to licensing reform have a history of lobbying and active participation in this area.
[69] On cross-examination, in relation to the question whether he was conscious of the fact that the Referred Recommendations might come before City Council at the February 19, 2014 meeting, Mr. Barr acknowledged that he did not do anything to confirm whether or not the Referred Recommendations would be before Council, and said: “the other guys say… I guess anything could happen, but it wasn’t […] the word […] on the street.” He then said that “maybe a few in the [TTA] crowd maybe” attended the Council meeting to show their support for the continued referral of the TTL recommendations.
[70] Having regard to the known practices of City Council with respect to the scope of consideration of referred recommendations, the history of the TTA, its past engagement with the City, and TTA’s ongoing lobbying efforts, I do not accept Mr. Barr’s evidence that he believed that the Referred Recommendations would not be considered at the February 19, 2014 meeting. Rather I accept the evidence of Mr. Mughal and find as a fact that TTA and most other interested stakeholders knew that the potential enactment of the TTL regime was among the recommendations that were to be considered at that meeting.
[71] I therefore find that the City’s notice in the agenda published on February 13, 2014 both was and was understood to be notice that City Council would be considering the possible implementation of the TTL regime as described in the Referred Recommendations at its February 19, 2014 meeting. I therefore reject TTA’s submission that the City failed to provide proper notice of its intention to enact those aspects of the TTL regime. Subject to my comments below regarding the imposition of a deadline for the mandatory conversion of STLs to TTLs, the applicant’s challenge to the new by-laws on this ground fails.
[72] While I have found that adequate notice was given of City Council’s intention to consider the TTL regime as contained in the Referred Recommendations, the same cannot be said about the issue of imposing a mandatory deadline for all taxi licences to be converted to TTLs. The Framework Report issued June 13, 2013 said only that the City was “evaluating options” to expedite the transition from STLs to TTLs. In the Final Staff Report, nothing was said about a mandatory conversion date for STLs to become TTLs. The Referred Recommendations merely provided for the requirement that, effective January 1, 2019, STLs be converted to TTLs when they were transferred to a new owner. In effect, this proposal would allow all STLs owners to continue to enjoy the benefits of that category of licence as long as they were alive and continued to own the licence. There was no mention of a date or deadline for conversion.
[73] It is fair to say, then, that there was no advance notice of the City’s intention to consider and enact a change that would force persons who continued to own STLs to convert their licences to TTLs. This issue was not on the published agenda for the February 19, 2014 Council meeting, because it had not been raised previously. It first arose during the course of the Council debate concerning the TTL regime. During that meeting, without any prior notice, a motion was proposed and passed to establish June 30, 2024 as the final date for owners of STLs and Ambassador licences to convert them to TTLs.
[74] As a result, I find that the City gave no notice of its intention to impose a deadline for the mandatory conversion of STLs to TTLs by June 30, 2024, or any other date. Such failure was, in my view, a breach of the notice requirements in the City’s Procedural By-law. I will deal with the effect of this breach below.
Issue 2(b) – Did the City breach its Procedural By-law by treating the Referred Recommendations as before Council?
[75] I turn now to TTA’s submission that City Council’s practice of treating referred recommendations as being part of a Committee’s report under consideration before Council is contrary to its own Procedural By-law.
[76] TTA’s principal submission is that it was contrary to the Procedural By-law to treat L&SC’s entire report as being open for consideration at the February 19, 2014 Council meeting. It disputes Mr. Elvidge’s use of Robert’s Rules of Order to conclude that when a partial report is before Council, Council may consider the entire report as the “entire item” before them. TTA argues that this is contradictory to the clear wording of the Procedural By-law. That by-law states at §27-73 that Council members may only make amendments to the “main motion” before them, which are “Committee’s recommendations to Council.” TTA argues that, at the February 19 meeting, the only recommendations of L&SC that constituted the “main motion” were those that had not been referred back to staff.
[77] TTA also takes issue with the method by which the Referred Recommendations were “brought before” Council, that is, through the motion to amend the Approved Recommendations to include the Referred Recommendations. It points to §27-73(c)(1) of the Procedural By-law, which states that “an amendment may propose that a different or additional action be taken on the subject matter of the main motion provided that it is directly relevant to the main motion.”
[78] TTA submits that while the term “subject matter” is nowhere defined or described in the Procedural By-law or COTA, guidance can be found in the Committee reports that underlie the creation of the Procedural By-law in 2006. Those reports evince a particular concern to limit amendments to those that are “germane” to the main motion. Specifically, those reports suggest that “proper parliamentary procedure limits the ability to amend main motions to specific amendments that insert, add, delete, delete and insert or substitute words in the main motion.” In the present case, the 30 recommendations that were properly before Council as the “main motions” were relatively superficial changes to specific areas of the taxicab industry, such as the ability of taxicab drivers to charge a cleaning fee to clients who soil their taxis. By contrast, the TTL proposal represented a new taxi licensing regime, which was a wholesale change to the structure of the industry. Thus, the argument concludes, the motion to amend the Approved Recommendations by importing the TTL as outlined in the Referred Recommendations was procedurally improper.
[79] TTA further argues that the process at the February 19, 2014 meeting was marred by an additional procedural flaw. When the matter of debating the Referred Recommendations arose, Councillor Mammoliti raised a point of order. The Chair asked for advice from the City Clerk’s office (which advice is quoted above), but made no formal ruling on the point of order. Rather, after the advice from the City Clerk’s office was received, the meeting merely continued. There was no further request for a ruling on the point of order nor any challenge to the Chair. The Procedural By-law provides that, where a point of order is raised, the Chair is required to rule on it. TTA submits that the failure of the Chair to do so was a violation of the prescribed procedure.
[80] The respondents point to those portions of the Procedural By-law that contain the general rules for making motions. They note that §27-68(2) permits a member to make a motion that “takes action on the matter that is currently before Council for debate.” In their submission, this broadens the topic before Council beyond the recommendations of the Committee or the “main motions” in §27-70. They argue that the language of “main motions” in §27-70 exists not to limit Council’s consideration of an entire report, but rather to emphasize that Committee recommendations can be adopted without amendment by consent unless Council decides otherwise, as stipulated in §27-70(c).
[81] With regard to the propriety of the amendments, the respondents also submit that the “subject matter” of the “main motions” was “The Taxi Industry Review - Final Report.” The respondents emphasize that interpreting the Procedural By-law in this manner is consistent with Council’s past practices and, as a consequence, consistent with the by-law itself, which states at §27-6(c) that the “Chair may use Council’s practices and former decisions, including previous rulings, in applying these rules and in making rulings.”
[82] TTA agrees that Council has the power to remove items from a Committee. It argues, however, that to do this, Council would have to follow procedural rule §27-60. In essence, Council members may make a motion to remove a matter form further consideration by a Committee, but such a motion must then pass by a vote of two-thirds. Such a removal motion must be made with notice, and therefore must be published on the agenda for the City Council meeting at which it would be made. In this case, the motion by which the Referred Recommendations were “amended” into the Approved Recommendations and in effect were “removed from Committee” passed with a 68% majority, above the requisite two-thirds amount.
[83] The City argues that the rule in §27-60 operates only when a Committee has not reported to Council at all, not when the Committee has submitted a partial report to Council and referred other parts of that report.
[84] As evidenced from the above arguments, the Procedural By-law is open to various interpretations. It does not specifically address the propriety of Council dealing with an entire Committee report in circumstances where the Committee has approved some recommendations contained in a staff report but has referred others back to staff for further study.
[85] As previously noted, as a general rule courts show deference to municipalities and are reluctant to interfere with decisions of municipal governments within their jurisdiction. The deference of the courts to municipal councils extends to court oversight in the face of alleged procedural irregularities.
[86] As the Court of Appeal stated in Friends of Lansdowne Inc. v. Ottawa (City), 2012 ONCA 273, 349 D.L.R. (4th) 41, at para. 70:
Assuming the absence of bad faith, any technical failure on the part of the municipality to adhere to its internal rules and procedures is an irregularity that does not vitiate the challenged decision.
The Court of Appeal went on to quote with approval the following passage from Ian Rogers, The Law of Canadian Municipal Corporations, looseleaf, 2d ed.(Toronto: Thomson Carswell, 1971), at para 48.22:
The procedure adopted by a council in passing by-laws or in transacting any other business within its jurisdiction, in the absence of express statutory requirements, is a matter wholly of domestic concern and internal regulation. The courts will accordingly not give effect to objections based upon the failure of council to observe its established procedure, unless there is clear evidence of bad faith or fraudulent intent(s).
[87] In the present case, there is no statutorily-mandated requirement to provide notice of an intention to pass a licensing by-law or to consider a licensing matter in a specific fashion at a Council meeting. It follows that the City is not in breach of a statutorily-mandated requirement.
[88] As I have found as a fact, City Council acted as it historically has and treated the entire L&SC report, including the Referred Recommendations as being before it for action. The Procedural By-law is open to that interpretation. In light of the deference due to municipalities in relation to the transaction of business within their jurisdiction, it is not for this court to intervene and say otherwise. As noted earlier, absent evidence of bad faith or fraudulent intent, the courts will not give effect to technical objections founded upon an alleged failure by a municipal council to follow its established procedures. As such, I conclude that it was proper for City Council to consider and vote upon the Referred Recommendations. I will consider below the significance of the failure to give notice of the proposed enactment of a deadline for all STLs to become TTLs, as well as TTA’s submissions regarding bad faith.
[89] Even if Council’s actions were found to be in breach of its Procedural By-law, in my view, none of the breaches that TTA alleges rise above the level of procedural irregularity, subject only to the issue of the mandatory conversion deadline.
Issue 3 – What is the effect of any breaches of the Procedural By-law on the legality of the amendments to the taxi licensing by-law?
[90] I have concluded above that the City did not breach its Procedural By-law when it treated the Referred Recommendations as properly before Council for possible implementation at the February 19, 2014, meeting. At most, Council’s consideration of the Referred Recommendations may have involved purely technical breaches. I reach a different conclusion with respect to the implementation of the mandatory conversion deadline.
[91] Subsection 214(1) of COTA (previously quoted) empowers the court to review the actions of municipalities and to quash by-laws or other enactments on the ground of illegality. According to the Supreme Court in London (City) v. RSJ Holdings Inc., 2007 SCC 29, [2007] 2 S.C.R. 588 (at para. 35), in the context of judicial oversight of municipal actions, illegality is “a broad, generic term that encompasses any non-compliance with the law.” A finding of illegality does not necessitate that the resulting enactment be quashed; the decision to quash is within the court’s discretion. See RSJ Holdings at para. 39.
[92] While courts, in the spirit of deference, have consistently refused to quash by-laws for “technical failure of the municipality to adhere to its internal rules,” the effect and significance of a substantive breach of these rules is an open question. In Blyth v. Northumberland (County) (1990), 1990 CanLII 6752 (ON SC), 75 O.R. (2d) 576 (Gen. Div.), Crossland J. recognized a distinction between a technical and a substantive breach of a procedural by-law, writing (at para. 20):
The case at bar is to be distinguished from Re Manufacturers Life Insurance Co. and Burnaby (District), [(1987), 1987 CanLII 2770 (BC SC), 13 B.C.L.R. (2d) 166, 37 D.L.R. (4th) 742 (B.C.S.C.)]. In Re Manufacturers Life Insurance Co. and Burnaby (District), the error involved the contravention of a provision against repeated reconsideration of a question, which in the court’s opinion was an error of a substantive nature going to the root of the validity of a by-law. On the other hand, the error alleged in the case at bar is of a purely technical nature which would not be fatal to the motion for reconsideration.
[93] The above passage implies that when a municipality’s failure follow its procedural by-law is “an error of a substantive nature going to the root of the validity of the by-law,” the court is not precluded, on the ground of deference, from intervening and quashing the resulting enactment for illegality. In subsequent decisions where courts have refused to quash by-laws due to non-compliance with non-statutory procedural by-laws, the courts have consistently referred to “mere technical breaches” or “technical irregularities.” No court has held that a substantive breach of a procedural by-law cannot result in court intervention.
[94] In Friends of Lansdowne (at para. 70), the Court of Appeal reiterated that any technical breach of a municipality’s internal rules or procedures would not vitiate a municipality’s decision. The court went on to list the factors that the Supreme Court of Canada has considered when determining whether to quash a by-law for illegality. This suggests that these factors can help to determine whether a municipality’s breach of its procedures is merely technical. These factors include: the nature of the by-law in question; the seriousness of the illegality committed; the consequences of the illegality; and delay or mootness. See Friends of Lansdowne, at para. 73; also see RSJ Holdings, at para. 39.
[95] In my view, the failure of the City to provide notice of its intention to enact the 2024 mandatory conversion deadline rises to the level of a “substantive breach.” I reach that conclusion for the following reasons. The notice requirements outlined in Toronto Municipal Code under Chapter 27 (Procedures) and Chapter 162 (Notice, Public), exist to facilitate the participatory democratic process envisioned in COTA and the Code. Section 2 of COTA recites that one of the statute’s purposes is to “[e]nsure that the City is accountable to the public and that the process for making decisions is transparent.” A technical breach of a requirement for giving notice (for example where the designated format for giving notice is not followed, but actual notice is still given) would stand the test for transparency, and be excusable. By contrast, where a breach of a notice requirement leads to the result that no notice is given of a significant potential legislative step, such an omission goes to the heart of the notice requirement – to facilitate transparency and participation—and cannot be called merely technical.
[96] The particular portion of the TTL regime that was enacted in breach of the notice requirements – the 2024 mandatory conversion date – is one with serious economic repercussions for a class of licence-holders. It removes from them, at a future date, an existing right or benefit upon which many of them depend for their livelihood and for which they may well have paid a significant amount of money. I recognize that a by-law is not open to review by a court “because of the unreasonableness or supposed unreasonableness of the by-law.” See COTA, s. 213. That said, although it is within the City’s purview to deal in such a way with a class of licences and licencees, the serious impact on STL holders underscores the importance of providing notice and a chance to be heard on the subject of a mandatory conversion date, in accordance with the Procedural By-Law.
[97] One of the consequences of the failure to provide notice that a mandatory conversion deadline might be imposed is that there was no advance study or consideration of the impact of such a provision before the City enacted the 2024 date. Stakeholders were not given an opportunity to make representations on alternative dates or solutions. TTA was an active participant in the consultation process and engaged in significant lobbying efforts. Had TTA known that a mandatory conversion date would be considered, it would likely have made its members’ concerns known to City Councillors. In contrast to a technical breach of the Procedural By-Law, such as the failure to rule on a point of order when the outcome of the ruling would have been obvious, the outcome of providing notice in this case is far from obvious.
[98] I therefore conclude that this breach of the notice requirement contained in the Procedural By-Law was substantive and went to the root of the validity of that section of the by-law amendment which provided for a mandatory conversion date. As a result, I find that the 2024 mandatory conversion date aspect of the by-law was enacted illegally and should be quashed.
Issue 4 - Should the amendments to the taxi licensing by-law be quashed on the ground of bad faith?
[99] Finally, TTA argues that the amendments to the taxi licensing by-law by which the TTL regime was enacted should be quashed on the grounds that they were passed in bad faith.
[100] In the words of Laskin J.A. in Equity Waste Management (at para. 61): “[b]ad faith by a municipality connotes a lack of candour, frankness and impartiality. It includes arbitrary or unfair conduct and the exercise of power to serve private purposes at the expense of the public interest.” When a Council acts in bad faith, it has “acted unreasonably and arbitrarily and without the degree of fairness, openness, and impartiality required of a municipal government.” (Re H.G. Winton Ltd. and Borough of North York (1978), 1978 CanLII 1566 (ON SC), 20 O.R. (2d) 737 (Div. Ct.), at para. 21).
[101] By-laws are presumed to have been enacted in good faith, and there is a high burden on an applicant seeking to establish bad faith: Seguin (Township) v. Hamer, 2014 ONCA 108, at para. 5. A brief overview of situations in which the courts have found bad faith illustrates the kind of conduct that normally attracts such censure: lack of notice of a by-law that was enacted for a collateral purpose (Grosvenor v. East Luther Grand Valley (Township), 2007 ONCA 55, 84 O.R. (3d) 346); by-laws passed only to appease a particular group and lacking any legitimate planning reason (Equity Waste Management); by-laws singling out only one property to the owner’s detriment (H.G. Winton). In essence, a finding of bad faith requires evidence demonstrating that the municipality acted other than in the public interest (Municipal Parking Corporation v. City of Toronto (2009), 2009 CanLII 65385 (ON SC), 314 D.L.R. (4th) 642 (Ont. S.C,), at para. 24) or without the frankness and impartiality that indicate good faith (Pedwell v. Pelham (Town) (2003), 2003 CanLII 7488 (ON CA), 37 M.P.L.R. (3d) 161 (Ont. C.A.)).
[102] TTA argues, broadly, that the actions of City Council in choosing to deal with the Referred Recommendations at the February 19, 2014 meeting, in the face of L&SC’s referral of the TTL regime for further staff study, were unreasonable, unfair and arbitrary. It focuses specifically on the alleged arbitrariness and unfairness of Council in amending the implementation dates in the Referred Recommendations. TTA takes issue with Council imposing a start date of 2014, and points to the numerous justifications given for the 2019 start date in the Committee reports and throughout the consultation process. TTA also asserts that 2024 end date – and any end date for that matter—was never discussed in the consultation phase and staff never recommended any such date, and so Council acted in bad faith in imposing such a date.
[103] For the reasons that follow, I am not persuaded that the Council acted in bad faith in enacting any of the amendments to the taxi licensing by-law.
[104] As discussed above, there was no procedural unfairness in Council enacting the TTL, nor in imposing a 2014 start date. These decisions were also not arbitrary. Council members discussed the reasons for wanting to implement the TTL as soon as possible, focusing heavily on the impact delay might have on the goal of accessibility. While I have found that the implementation of an end date of 2024 was in substantive breach of the Procedural By-Law regarding notice, I do not think Council’s actions in passing this part of the by-law this rose to the level of bad faith.
[105] Although the City should have given notice of its intention to consider a mandatory conversion date for STLs, its failure to do so was not an instance of it acting other than in the public interest. This is not a case where the lack of notice was a deliberate attempt by City Council to keep stakeholders in the dark. The City had engaged in extensive consultations with stakeholders and had worked hard to engage all interested parties. Throughout the debate during the February 19 meeting, City Councillors repeatedly reinforced their desire to implement the one-tiered licensing system expediently precisely because this was in the public interest. At best, the implementation of the 2024 mandatory conversion date without having discussed that possibility within the consultation phases was an error. There is, however, no evidence to show that Council did so unreasonably, arbitrarily, without impartiality, or for a collateral purpose. To the contrary, the extensive and open consultation process in which it engaged, the notice provided, and the public debate that preceded the enactment of the changes, all point to the conclusion that the City acted in good faith.
[106] Nevertheless, TTA contends that the entirety of the amending by-law should be struck down for bad faith on the basis that Council’s actions bear certain “badges” which might not individually constitute bad faith, but cumulatively rise to such a level. For this proposition, TTA relies on Luxor Entertainment Corp. v. North York (1996), 1996 CanLII 11766 (ON SC), 27 O.R. (3d) 259, at para. 101:
In determining whether a by-law has been enacted in bad faith … the court should have regard to the presence or absence of certain evidentiary “badges” or indicia of bad faith which have been traditionally recognized by the courts. While the existence of one or more of these evidentiary badges might be insufficient to constitute bad faith, it is the cumulative effect of all of the badges, viewed collectively, which the court should take into account.
Common “badges” of bad faith include: questionable timing; decisions made under false pretences; improper motives; lack of notice; the usual practices and procedures are set aside; the parties most affected are kept in the dark; or the law singles out one individual or property. See: Markham v. Sandwich South (Township) (1998), 1998 CanLII 5312 (ON CA), 160 D.L.R. (4th) 497; see also H.G. Winton.
[107] TTA argues that the following are indicia of bad faith:
a. The failure to provide notice on the Council Agenda released February 15, 2014 that the TTL would be considered at the February 19, 2014 meeting;
b. The failure of Council to follow its Procedural By-law during the Council meeting;
c. The decision of Council to accept the Referred Recommendations and implement the TTL despite references to potential legal challenges;
d. The amendments to the implementation dates recommended by Committee, especially proposing a mandatory conversion date of 2024 for the first time;
e. The eventual adoption of the February 19, 2014 resolutions into the bylaw on June 13, 2014, approximately two weeks before it was to come into force.
[108] I do not agree that the indicia listed above either individually or cumulatively rise to the level of bad faith. I have dealt above with the questions of notice and procedural irregularities. As regards the references in Council debate to potential legal challenges, I simply note that Council was keenly aware of the litigious history of the taxi industry in the face of new licensing schemes and it is reasonable that some Councillors would raise and consider this factor. Moreover, to find that Council as a whole acted in bad faith on the basis of a few Councillors’ words about possible legal challenges would involve taking these comments as reflecting the view of the entire Council. The courts have been clear that this is an improper approach: “A court should not be quick to find bad faith because members of a municipal council … express strong views” against a project. See: Equity Waste Management, at para 69.
[109] The Ontario Court of Appeal was faced with a similar argument about cumulative bad faith in Detlor v. Brantford (City), 2013 ONCA 560, 367 D.L.R. (4th) 200. The court refused to give effect to that argument, finding that none of the “badges” referred to in that case evidenced bad faith. As a result, neither did they cumulatively rise to the level of bad faith. I reach the same conclusion in the case before me, for the same reason. I find as a fact that the City acted in good faith, throughout.
[110] Lastly, TTA argues that this case is factually similar to Langille (c.o.b. Rickshaw Runners of Toronto) v. Toronto (City),2007 CanLII 15245 (Ont. S.C.). There, City Council passed a by-law which, among other things, instituted a maximum fare for pedicab rides. The maximum fare was enacted at a City Council meeting without notice, research or consultation, despite earlier requests by Council and Committee that a Staff Report be prepared addressing the issue of maximum fares. Belobaba J. found that imposing this fare was “so arbitrary and so procedurally unfair that it must be set aside on the basis of bad faith” (para. 63). He interpreted “arbitrary” to mean a decision made on a personal whim or on the basis of random choice without any supporting evidence. He interpreted “unfair conduct” to include procedural unfairness, “the failure to give all stakeholders proper notice of the proposed bylaw, and the failure to provide the stakeholders, or at least those most affected… with an opportunity for input and a chance to be heard” (at para. 47).
[111] The present case can be distinguished from Langille based on my factual finding that the behaviour of City Council throughout the entirety of the taxi industry review process was characterized by good faith. The length, detail and extent of consultations and deliberations both before and during the City Council meeting evince efforts to gather stakeholder input fairly, so that a non-arbitrary decision could be made. In Langille, City Council proceeded in the face of unfulfilled requests for further consultation and research on the maximum fare requirements, indicating that it recognized it lacked the requisite information to impose such a fare, but chose to proceed anyway. In the present case, significant research into expediently converting to a one-tiered licensing system had been conducted. Council did not proceed in the face of a recognized dearth of information – instead, it mistakenly proceeded despite a lack of appropriate notice to stakeholders about the possible implementation of a mandatory end-date. Without more, the latter action does not constitute bad faith.
[112] In the result, TTA’s argument that the TTL amendments should be quashed on the ground of bad faith fails.
11) Conclusion and Disposition
[113] For the above reasons, I conclude that the resolution of City Council and the consequent by-law amendment providing for a mandatory deadline for the conversion of all taxi licences to TTLs were illegally passed. Given the significant impact of that change, I consider this a case in which I should exercise my discretion to quash that resolution and that portion of the by-law and I so order. The remainder of the TTL regime was, in my view, validly enacted. The rest of the relief sought is refused, accordingly.
12) Costs
[114] If the parties are unable to agree on costs, I direct them to arrange a conference call with me within 15 days to discuss a suitable process to resolve that issue.
___________________________ Stinson J.
Released: January 30, 2015
Toronto Taxi Alliance Inc. v. City of Toronto, 2015 ONSC 685
COURT FILE NO.: CV-14-502614
DATE: 20150130
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
TORONTO TAXI ALLIANCE INC.
Applicant
– and –
CITY OF TORONTO and TAXIWORKERS ASSOCIATION OF ONTARIO
Respondents
REASONS FOR JUDGMENT
Stinson J.
Released: January 30, 2015