Mahmoud and Lebanese Palace Inc. and Itaif v. City of Ottawa, 2017 ONSC 5138

CITATION: Mahmoud and Lebanese Palace Inc. and Itaif v. City of Ottawa, 2017 ONSC 5138

COURT FILE NO.: 17-72192

DATE: 2017/08/30

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Brian Mahmoud and Lebanese Palace Inc. and Fadi Itaif

Applicants

– and –

City of Ottawa

Respondent

Lawrence Greenspon and Ninetta Caparelli, Counsel for the Applicants/Moving Parties

Anne M. Tardif and Alyssa Tomkins, Counsel for the Respondent/Responding Party

HEARD: August 22, 2017

ENDORSEMENT ON MOTION

ROGER, P. J.

Introduction

1The applicants bring a motion for an interlocutory injunction restraining the City of Ottawa from enforcing certain bylaws that prohibit the use of water pipes in indoor public places.

2The applicant, Mr. Mahmoud, owns and operates Lebanese Palace Restaurant. He purchased this restaurant in 2015 and subsequently made water pipes available for smoking shisha. In 2016, the restaurant invested in additional water pipes and in renovations to accommodate shisha.

3However, in November 2015, the City passed a motion to explore regulating the use of various non-tobacco products, including shisha. The City conducted some consultations and adopted a bylaw prohibiting shisha smoking in indoor public places in September 2016. The bylaw came into force on December 1, 2016, and enforcement commenced on April 3, 2017.

4The applicant received an offence notice for contravening the applicable bylaw on June 16, 2017. In addition, in May 2017, the applicants’ landlord served notice on the applicants that Lebanese Palace was to immediately cease the use of water pipes. The applicants stopped selling shisha on July 2, 2017.

5On March 31, 2017, the applicants brought an application to this Court for a declaration that certain bylaws are unconstitutional. The applicants allege that the bylaws contravene section 15 of the Charter by discriminating based on the non-enumerated ground of culture. They also rely upon section 27 of the Charter alleging that the bylaws are inconsistent with the preservation and enhancement of the multicultural heritage of Canadians. On August 11, 2017, the applicants brought this motion for an injunction.

Issues

6The issues raised by this motion are those typically applicable to interlocutory injunctions – whether the moving party has demonstrated the three part test set out by the Supreme Court of Canada in RJR MacDonald:

• Have the applicants established that there is a serious question to be tried;

• Have the applicants established that they will suffer irreparable harm if the injunction is not granted; and

• Have the applicants established that the balance of convenience favours the granting of the injunction (RJR MacDonald v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311).

Have the applicants established a serious issue to be tried?

7The City concedes that the applicants have met this low threshold and argues that the weakness of the applicants’ case is to be considered at the balance of convenience part of the test.

8Indeed, the issues raised by the applicants in this application are not of the frivolous or vexatious type. Although they are novel and may be difficult to successfully establish, they do raise a serious question to be tried and therefore meet this first part of the test.

Have the applicants established that they will suffer irreparable harm if the injunction is not granted?

9The City argues that the applicants’ evidence of irreparable harm is greatly exaggerated, that the damages alleged are monetary and quantifiable, and that the applicants’ delay in pursuing this injunction prevents them from obtaining an injunction.

10Irreparable refers to the nature of the harm in the sense of harm that either cannot be quantified in monetary terms or cannot be cured.

11The applicants’ evidence on irreparable harm is not the strongest. However, it establishes reductions in gross sales since the restaurant stopped using water pipes, in July 2017. This observed reduction in sales is quantifiable, but it does not measure the applicants’ market loss and impact on the applicants’ business and reputation. More importantly to the issue of irreparable harm, I am concerned that the corporate applicant (Lebanese Palace Inc.) may not have standing to claim damages for discrimination and that this could result in harm to the applicants that could not be cured.

12RJR MacDonald recognizes that in Charter cases, even quantifiable financial loss may be considered irreparable harm if it is unclear that such loss could be recovered at the time of a decision on the merits (see paragraph 61 of RJR MacDonald: “…until the law in this area has developed further, it is appropriate to assume that the financial damage which will be suffered by an applicant following a refusal of relief, even though capable of quantification, constitute irreparable harm”). This seems precisely the situation in this case, where the standing of Lebanese Palace to claim damages in a Charter case could be at issue.

13Considering the above, although the applicants delayed in bringing this application and motion for an injunction, the delay is not sufficient to negate or sufficiently undermine the finding of irreparable harm and the applicants have met this second part of the test.

Have the applicants established that the balance of convenience favours the granting of the injunction?

14The third branch of the test on an interlocutory injunction requires an assessment of the balance of convenience. This often determines the result.

15In addition to the damage that each party alleges it will suffer, the interest of the public must be taken into account at this stage of the analysis in cases involving public legislation. The effect that a court decision will have on the public interest may be relied upon by either party and as indicated at paragraph 80 of RJR MacDonald:

“When the nature and declared purpose of legislation is to promote the public interest, a motions court should not be concerned whether the legislation actually has such an effect. It must be assumed to do so. In order to overcome the assumed benefit to the public interest arising from the continued application of the legislation, the applicant who relies on the public interest must demonstrate that the suspension of the legislation would itself provide a public benefit.”

16The applicants have established that Lebanese Palace will experience financial losses and that its employees have and will be affected if the injunction is not granted.

17In addition, the applicants argue that if the injunction is not granted, Arab-Canadians living in Ottawa will not be able to smoke water pipes or shisha in public places while this application is proceeding and before a decision is rendered. The applicants argue that water pipes and shisha have cultural importance dating back more than 200 years. They contend that a ban on smoking water pipes in public would have negative consequences on Arab-Canadians because such a ban would significantly reduce social contact and necessarily restrict shisha to the home, thereby exposing children. They also argue that young people would not be able to gather and share in this common cultural activity. They add that this would minimize the extension of life of older people who would not be able to take part in this pastime to socialize, and would pose risks to this common cultural activity. The applicants filed an affidavit by a university professor, Dr. Dib, who states the above. As such, they argue that they have established that the injunction would provide a public benefit to Arab-Canadians.

18In RJR MacDonald, the Supreme Court of Canada also indicated that public interest includes both the concerns of society generally and the particular interests of identifiable groups. It also rejected an approach that excludes the consideration of any harm not directly suffered by a party to the application. Here, the applicants have identified a group (Arab-Canadians) and have identified concerns or particular interests that could be impacted.

19The applicants also argue eight factors, including: that the City did not consider ways to accommodate shisha or the impact on the health of families if this ban results in more shisha smoking at home; that the City took seven months from September 2016 until April 2017 before it started enforcement; that the City agreed not to proceed with any enforcement trial until after this application is decided; and that this application is scheduled to be heard in February 2018. The applicants argue that the actions of the City diminish its arguments that health risks require immediate action and the dismissal of this motion.

20On the other hand, if the injunction is granted, the City argues that it will diminish the City’s clear authority to regulate smoking and to protect public health. It argues that it will re-normalize this activity and negatively impact public health.

21The City has filed evidence that workers in the hospitality and service industry will continue to be exposed to harmful and toxic second hand smoke until this application is heard. The City also argues that an interlocutory injunction would be detrimental to its efforts to counter the misperception that water pipes are a healthy alternative to cigarette smoking and its efforts to de-normalize smoking, including water pipes. The City filed an affidavit by the City’s medical officer of health that supports the above. Dr. Levy also indicates that other Ontario municipalities have prohibited water pipe use in enclosed public spaces and that several countries have also done so, including Lebanon, Turkey, and parts of Saudi Arabia and India. The City also filed an affidavit by a university professor who states that water pipe smoking is not an essential part of Arab culture. This contradicts, to a certain extent, the affidavit filed by the applicants’ university professor.

22RJR MacDonald establishes that in Charter cases, the concept of inconvenience should be widely construed. It also establishes that for a public authority, such as a City, irreparable harm to the public interest will be assumed if the City establishes a duty of promoting or protecting the public interest and shows that the bylaw was passed as a result of this responsibility. In this case, it is not disputed that the City had authority and acted under that authority when it passed the bylaw in issue. It is therefore presumed that irreparable harm to the public interest would result if the injunction is granted. Moreover, health risks associated with water pipe smoking are not disputed and, as indicated above, the affidavit of Dr. Levy emphasizes that if the injunction is granted, the continued exposure to harmful second hand smoke will impact members of the public and workers in the service industry and will re-normalize shisha to the younger population.

23As was indicated by Smith J. in an earlier Ottawa decision on smoking in public places (City of Ottawa v. Barrymore’s Inc., 2002 5565 at para. 68), the increased health risk of contracting cancer or other serious illnesses caused by second hand smoke exposure constitutes significant inconvenience to the public. In this regard, I place little weight on some of the statements made by Dr. Dib, who occasionally strayed from his area of stated expertize, including his statement that the City’s bylaws will expose many children to shisha smoke in their home who otherwise would have been protected. To do otherwise would as well risk “…judicial inquiry into whether the government is governing well…” (RJR MacDonald at para. 72).

24On the issue of delays, it seems circular for the applicants to argue that the City allowing seven months prior to implementation of the enforcement phase (September 14, 2016 to April 3, 2017) detracts from the health risks when this time was to allow businesses, such as Lebanese Palace, time to adjust or bring required legal action. Instead, the applicants waited until March 31, 2017, to start an application and waited an additional four months to bring this motion. If the applicants had acted promptly and started legal proceedings soon after the adoption of the bylaws, rather than when their landlord threatened eviction if they did not discontinue use of the shisha, it might have been possible to obtain an earlier ruling from this Court, possibly prior to the start of the enforcement phase.

25The applicants argue as well that the City’s agreement to adjourn the prosecution of its offence also contradicts the City’s argument that enforcement is urgently necessary. However, the City’s agreement to adjourn the prosecution in the Ontario Court of Justice until the application is heard is not an agreement to suspend enforcement of the applicable bylaw. Such an adjournment promotes judicial efficiency and, in my opinion, does not demonstrate that the balance of convenience lies in favour of the applicants.

26I do not consider that such actions by the City detract from concerns over public health and public interest. Rather, such actions show concern for due process and judicial efficiency.

27When I weigh on one hand the temporary limits to a possibly important cultural tradition and the financial impacts on the applicants, both as described in the applicants’ evidence, and when I weigh on the other hand public interest and an increased risk to the public of negative health consequences, the balance tips in favour of public interest and of limiting the risks to the health of the public. Consequently, the applicants have not met the third part of the test applicable to interlocutory injunctions.

Conclusion and costs

28For the reasons stated above, the applicants’ motion for an interlocutory injunction is dismissed.

29The motion was heard on August 22 and a summary of the above was read to the parties on August 29, following which I heard submissions on costs.

30The City seeks substantial indemnity costs on the basis of the extraordinary nature of interlocutory injunctions and the attendant intensity of work required to respond on short notice; in this case the City seeks $24,371.08. The applicants, despite being unsuccessful, seek costs of this motion payable to them or, alternatively, no costs. The applicants’ costs outline seeks partial indemnity costs totalling $21,802.22. The applicants argue that this was a serious motion, that they will continue to suffer harm pending a final decision, and that the public interest in the ultimate issue warrants that it be awarded costs of the motion.

31The fixing of costs incidental to a proceeding or to a step in a proceeding is a discretionary exercise (see section 131 of the Courts of Justice Act). Costs are a way to administer justice and to control access to justice. They are designed to indemnify (in part), to encourage settlements, and to discourage inappropriate conduct. Elevated costs, or costs on a substantial indemnity basis, may be awarded in limited circumstances, including where a relevant offer was made or where one of the party engaged in behaviour that justifies a costs sanction (see Davies v. Clarington (Municipality), 2009 ONCA 722, 100 O.R. (3d) 66). Public interest litigation may in some circumstances be a relevant factor to consider, particularly when it promotes access to justice, provided that the applicants qualify as public interest litigants. Perell J. provides an excellent overview of costs generally and how to consider costs and public interest litigants (see Incredible Electronics Inc. v. A.G. Canada (2006), 2006 17939 (ON SC), 80 O.R. (3d) 723 (Ont. S.C.J.). As indicated in Incredible Electronics (see paras. 92-93), a public interest litigant is usually one that advocates a matter of public importance and one that has no or little to gain financially from participating in the litigation. Depending on the circumstances, it might be appropriate to consider how an order of costs will impact a public interest litigant.

32First, I address the request of the City that costs be awarded on a substantial indemnity basis. I note the following:

• Although this motion proceeded quickly, within about three weeks to one month from draft materials being provided by the applicants, it proceeded with professionalism and courtesy on both sides.

• This motion for an interlocutory injunction is not one where the motion was abandoned after responding materials were served. It is not one that was without merit, not one where a relevant offer to settle was made, and not one involving a nasty proxy fight with unfounded allegations and misconducted that proceeded within 52 hours. The facts here are different from the facts in the cases provided by the City.

• The cases relied upon by the City to argue substantial indemnity costs are all distinguishable.

33Consequently, this is not a case where circumstances warrant that costs be awarded on a substantial indemnity basis.

34Next, I address the issue of a public interest litigant. Although this is not a typical ordinary civil dispute involving only monetary issues, the applicants, Mr. Mahmoud and Lebanese Palace Inc., are not public interest litigants: they each have a lot to gain financially from participating in this application. In addition, this is also not a case involving a Charter claimant of limited means. Lebanese Palace is an ongoing business and there is no evidence before me that the applicants’ access to justice will be negatively impacted if an order for costs is made against them as a result of their unsuccessful motion. Although the same is not necessarily applicable to the applicant, Mr. Itaif, who filed no evidence and played essentially no role on this motion, I do not have enough evidence about him to arrive at a conclusion. Mr. Itaif appears to be a patron of the Lebanese Palace Restaurant but aside from this brief unsworn description, I do not have sufficient information to assess whether or not he is a public interest litigant.

35This was no doubt an important motion for all parties. The dismissal of this motion does not terminate or resolve the application; the application will likely proceed. This was not an overly complicated motion and, as indicated above, the parties proceeded expeditiously and professionally with the handling of this matter. Ultimately, the City successfully resisted this motion.

36On the hearing of a contested motion, unless the Court is satisfied that a different order would be more just, the usual rule is for the Court to fix costs and order them payable within 30 days.

37Considering all of the above facts and factors and law relied upon by the applicants, I do not believe that this is a case where the usual rule cited above should not be applied. I will therefore order that the costs of this motion be payable by the applicants within the next 30 days.

38On the issue of the amount of costs, I find the fees attributed to the City’s articling student to be somewhat high when compared to those of the other lawyers, including those claimed by the lawyers for the applicants. However, the amount sought for partial indemnity costs by the applicants totals $21,802.22, while the partial indemnity costs sought by the City total $15,761.69. The amount sought by the City for partial indemnity costs is within the reasonable expectations of the applicants and this amount would provide reasonable indemnity to the City.

39Consequently, I fix the costs of this motion on a partial indemnity basis in the all-inclusive amount of $15,761.69 payable by the applicants to the City within the next 30 days.

Pierre E. Roger J.