The Corporation of the Township of Tay v. Zhangjian Fan et al., 2018 ONSC 6375

COURT FILE NO.: 16-1738 DATE: 20181024 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

The Corporation of the Township of Tay Applicant – and – Zhangjian Fan, Van Ty Duong, Shel Bel Xin, Tho Bich Nguyen and Hai Thanh Nguyen Respondents

COUNSEL: Sarah Hahn for the Applicant Omarr Syed for the Respondents, Zhangjian Fan and Van Ty Duong No one appearing for Shel Bel Xin, Tho Bich Nguyen or Hai Thanh Nguyen

HEARD: October 5, 2018

Ruling on Injunction Motion

boswell j.

[1] There was a time, not long ago, when growing large quantities of marihuana in your residence was a bad idea under just about any circumstances. But times have changed. The Respondents have something in the order of 800 cannabis plants growing in a residential structure on Coldwater Road in Waubaushene, which is part of Tay Township. The Township isn’t troubled by the marihuana per se. What is at issue here is a matter of zoning. The Respondents are doing their growing in a neighborhood not zoned for that type of activity. The Township asks the court to enjoin the Respondents’ activities.

[2] Mr. Syed did his very best to persuade the court that an injunction ought not to issue on an interlocutory basis. He submitted that the Zoning By-Law is vague. He pointed out that the respondents are licensed growers and conducting their activities legally. Moreover, they require large quantities of marihuana for personal, medical use.

[3] Notwithstanding Mr. Syed’s able arguments, I find that an injunction must issue. This is a straightforward case. There is a valid Zoning By-Law in place. The Respondents’ growing activities are in breach of the By-Law. They are going to have to relocate their operations. The following reasons explain why I have reached this conclusion.

The Governing Principles

[4] The Township moves for an interlocutory injunction restraining the Respondents from growing, cultivating, processing or otherwise producing marihuana at 112 Coldwater Road, Waubaushene.

[5] The test to be applied on an interlocutory injunction application is well-settled. The Supreme Court endorsed the following three part test in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311:

(a) There must be a serious issue to be tried;

(b) The applicant must establish that it will suffer irreparable harm if the injunction is not granted; and,

(c) The balance of convenience must favour granting the injunction.

[6] The “serious issue to be tried” threshold is very low. It ordinarily requires an applicant to establish little more than that the case is not frivolous or vexatious. But in cases where the granting of an interlocutory injunction will have the practical effect of deciding the case on a final basis, courts have held that a higher threshold applies. Applicants in such circumstances are required to establish that they have a strong prima facie case: see Quizno’s Canada Restaurant Corp. v. 1450980 Ontario Corp., [2009] O.J. No. 1743 (S.C.J.) at para. 38.

[7] The “strong prima facie case” threshold is not so low. It has been described as a somewhat enhanced balance of probabilities standard. In other words, it requires a moving party to demonstrate a substantial likelihood that it will succeed at trial. In cases of mandatory injunctions, the standard has been interpreted as a requirement that the moving party demonstrate that it is clearly right and almost certain to be successful at trial. See, for instance, Quizno’s Canada, as above, at para. 39.

[8] The requirement to establish “irreparable harm” generally involves an analysis of whether the nature of the harm likely to result in the absence of an injunction is such that it could not be remedied if the applicant were ultimately successful at trial: see RJR-MacDonald Inc., as above, at para. 63.

[9] Where the moving party is a municipality seeking to enforce its by-laws, courts have held that the requirement to demonstrate irreparable harm is not applied in the same way. See Innisfil (Town) v. Innisfil Land Holdings Inc., 2003 CarswellOnt 1996, at para. 23.

[10] By-laws are enacted in the public interest and a municipality has a duty to see that they are enforced. Moreover, damages would be difficult to assess in relation to an ongoing by-law infraction and would typically be an inadequate remedy. In the circumstances, the requirement to establish irreparable harm is relaxed. See RJR-MacDonald, as above, at para. 76.

[11] The balance of convenience inquiry involves a weighing of factors pointing both to and away from the granting of the injunction. The particular factors engaged will vary from case to case. The public interest is certainly one factor to be considered in cases involving the enforcement of municipal by-laws.

The Factual Context

[12] The registered owner of 112 Coldwater Road is Mr. Fan. He leases the property to Mr. Duong.

[13] Mr. Duong is the holder of a Personal Production License for Marihuana for Medical Purposes. His license permits him to grow marihuana only at the location specified in the license. In this case, the specified location is 112 Coldwater Road, Waubaushene. Mr. Duong is authorized to grow 146 plants.

[14] Mr. Duong grows marihuana under his own license, but also under licenses granted to his co-respondents, Shel Bel Xin, Tho Bich Nguyen and Hai Thanh Nguyen. Those named individuals are apparently licensed to grow 244 plants each, all restricted to 112 Coldwater Road. I note that there is some question as to whether the licenses are presently valid or whether they have expired. I am treating them as valid for the purposes of this application.

[15] Mr. Duong consumes roughly 50 grams of marihuana per day. He uses it to deal with a sleep disorder, anxiety, diabetes, high cholesterol, high blood pressure and circulatory issues. His family physician, Dr. Shawn Seit, provided the court with a letter indicating that Mr. Duong suffers from degenerative arthritis which causes chronic pain in his knees and back. He says Mr. Duong will require medical marihuana for the rest of his life.

[16] 112 Coldwater Road is located in an area zoned Village Commercial (C1). The Township’s General Zoning By-Law 2000-57 enumerates the uses permitted in a C1 zone. The list is reproduced at Appendix “A” to this ruling. Suffice it to say that “cannabis grow operation” is not included on the list. There is, in fact, no permitted use on the list that one might reasonably argue is broad enough to encompass cannabis growing.

[17] To the contrary, the growth of cannabis, at least on the scale involved in this case, is an industrial use, permitted in General Industrial “M1” zones. The uses permitted in M1 zones are also set out on Appendix “A”.

[18] On July 24, 2014, the Township passed a motion that specifically characterized medical marihuana production facilities as “processing plants” which are permitted uses within the General Industrial and Prestige Industrial zones.

[19] Mr. Doung has been actively growing cannabis at 112 Coldwater Road since July 2014. He has been resistant to any efforts by the Township to compel him to relocate his growing operations.

[20] On April 8, 2015 a Notice was issued to Mr. Duong advising him that his use of the property was in violation of the Township’s Zoning By-Law and directing him to cease using the property for the production of marihuana. A Compliance Notice was subsequently issued to him in August 2015.

[21] Mr. Duong did not alter his use of the property. In the result, he was charged with a zoning infraction. He pled guilty to the charge on November 3, 2016 and was fined $500.

[22] Mr. Duong subsequently pursued, without success, an amendment to the Zoning By-Law to change the zoning of his property. He did not appeal the Township’s denial of his application to the Ontario Municipal Board.

The Parties’ Positions

[23] The Township’s position is simple. They assert that the production of marihuana for medical purposes is a use properly characterized as a processing plant operation. Such a use is permitted only within industrial zones. 112 Coldwater Road is not zoned industrial. Mr. Duong’s use of the property is therefore in violation of the Zoning By-Law. His defiance of the By-Law and his intransigent position leave the Township with no alternative but to seek injunctive relief.

[24] The Township contends that, on the facts, they have a strong prima facie case. They are enforcing a by-law enacted for the public good, and the balance of convenience favours the granting of an injunction.

[25] The Respondents ask the court to interpret their activities as something other than a “production facility” or “processing plant”, as characterized by the Township. A production facility, they say, is one that grows marihuana for sale to multiple parties. They contend that they are simply growing marihuana for their own personal, medical use and that there is nothing in the Zoning By-Law that prohibits them from doing so on Coldwater Road.

[26] The Respondents argue that the Township has failed to meet the test for interlocutory injunctive relief – particularly with respect to the third branch of the RJR-MacDonald test. The ambiguity of the By-Law must be considered, they submit, when assessing the balance of convenience. If the court agrees that the By-Law is ambiguous, then it would be an injustice to enjoin the Respondents’ present use on an interim basis.

[27] According to the Respondents, there is no identifiable harm to the community apart from some complaints about smell. The Respondents are willing to work with the Township in this respect. On the other hand, an injunction would completely shut down their growing operations. They would have to destroy their plants and relocate, which may take many months. In the meantime, Mr. Doung would have to source out marihuana in the marketplace, which he cannot afford to purchase. His health would suffer significantly in the result.

Analysis

[28] The analysis of the issues between the parties must proceed within the RJR-MacDonald framework.

(i) The Township has a strong prima facie case

[29] I am satisfied that the granting of an interim injunction would be tantamount to a final order. In the result, it is incumbent upon the Township to demonstrate that they have a strong prima facie case. In my view they have met that onus.

[30] It is worth noting that no issue is taken with the validity of the Township’s Zoning By-Law, nor with the motion passed in July 2014 that specifically defined medical marihuana production facilities as “processing plants” for purposes of interpreting the By-Law.

[31] The Respondents argue that the term “production facility” is vague and ambiguous. They deny that they are operating a production facility and contend that whether they are right in this regard is a serious triable issue; one that undermines the Township’s effort to demonstrate a strong prima facie case.

[32] I am unable to agree with the Respondents’ submission.

[33] I fully accept that growing a few rose bushes in the backyard could not be characterized as a rose production facility. Logically, the same must hold true for growing a few marihuana plants in the yard, or the basement for that matter.

[34] At what point a grow operation reaches the threshold of a “production facility” may not be entirely clear. But that does not make the By-Law ambiguous. It means only that a contextual assessment is required. In this case, the assessment is easy. The Respondents, save for Mr. Fan, are licensed to produce large numbers of cannabis plants. Mr. Duong is utilizing the property not just for his own licensed production, but also for that of three other individuals. Eight hundred plants is clearly a production facility in my view. Photographs of the production going on in the structure on the property bear this out. It is a large-scale operation.

[35] In any event, it is clear that marihuana growth is the predominant, if not the sole, present use of the property. However one chooses to characterize that use, it is not permitted in a C1 zone.

[36] I am able to conclude, even at this interlocutory stage, that the By-Law is valid and the present use by the Respondents is not permitted in the zone in which they are operating.

[37] In the result, I conclude that the Township has a strong prima facie case.

(ii) The Township will suffer irreparable harm

[38] Recall that this branch of the test is applied somewhat differently and in a more relaxed way when the issue is the enforcement of a municipal by-law. The questions to be asked are whether the Township enacted the Zoning By-Law for the public good and whether it has a duty to enforce it. Both are answered affirmatively here. This threshold test has been met. The Respondents’ counsel conceded as much in oral argument.

(iii) The balance of convenience favours the granting of the injunction

[39] There is no set formula for determining the balance of convenience. Each case must be looked at in context. Any number of factors may be engaged.

[40] In this instance, there is a superficial appeal to the Respondents’ argument that the Township will not suffer any significant prejudice in the near term. After all, no one is being harmed. The involved area of Coldwater Road is not a particularly dense area. There have been a few complaints of a strong odour, but there is nothing so pressing that it would justify shutting down this grow operation.

[41] Looked at more closely however, the appeal of the Respondents’ argument wanes.

[42] There is no dispute that the By-Law in issue was validly enacted. It was enacted for the public good; for the orderly planning of the municipality. Any breach of the By-Law impacts on the public good and undermines the orderly government of the Township.

[43] The breach in this case began in July 2014. Notwithstanding the ongoing attempts by the Township to enforce its By-Law, the breach continues. It is clear that Mr. Duong has no intention of ceasing his operation in its present location. In other words, he is thumbing his nose at the Township. He has had more than three years to come into compliance with the Zoning By-Law, but he refuses to do so.

[44] A failure to grant interlocutory relief in the clear circumstances of this case would send a very poor message. It would seriously undermine the jurisdiction and authority of the Township and its ability to enforce its by-laws. And it would permit, if not promote, an ongoing clear breach.

[45] There are, moreover, more concerns than just those relating to odour complaints. There are identified electrical and fire hazards associated with the present use of the property that create risks to the community.

[46] There are few, if any, factors that point away from granting the injunction. In my view, being compelled to comply with a validly enacted by-law is not prejudicial. It may be contrary to the Respondents’ subjective interests. But it is not prejudicial in a legal sense.

[47] I am not unsympathetic to Mr. Duong’s health concerns. I appreciate that it will take him some time to find alternative facilities and to have his license amended accordingly. That said, he has had substantial time in which to do so and has failed or refused to make any efforts to relocate to a properly zoned area.

[48] The “inconvenience” to Mr. Duong in having to relocate can, in any event, be largely attenuated by permitting him a reasonable amount of time to cease his operations at their present location.

[49] I conclude that the balance of convenience overwhelmingly favours the Township.

Conclusion

[50] An interlocutory injunction shall issue enjoining the Respondents, or any of them, from growing, cultivating, processing or otherwise producing marihuana, and from permitting any other party to do so, at 112 Coldwater Road, Waubaushene, Ontario.

[51] This injunction shall take effect January 15, 2019 in order to afford the Respondents an opportunity to move their operation to another licensed facility in a properly zoned area.

[52] If the parties are unable to agree on the issue of costs, they may make written submissions to the court on a fourteen day turnaround. The Township’s submissions shall be served and filed by November 7, 2018 and the Respondents’ by November 21, 2018. Submissions are not to exceed two pages in length and may be submitted electronically to my assistant at Bev.Taylor@Ontario.ca.

Boswell J.

Released: October 24, 2018

Appendix “A”

Village Commercial “C1” Zone Permitted Uses

Antique Shop Automobile sales and service establishment Automotive, service station Automobile washing establishment Business or professional office Clinic Commercial garage Commercial school Craft shop Club Daycare facility Dwelling units, accessory Financial institution Funeral home Garden centre Hotel Laundromat Motel Parking lot Personal service shop Place of entertainment Post office Public use Restaurant Retail store Tavern Veterinary establishment

General Industrial “M1” Zone Permitted Uses

Accessory commercial use and wholesale use Accessory office Accessory open yard storage Assembly plant Automobile repair garage Automobile sales and rental establishment Bulk fuel storage and supply Commercial garage Commercial self-storage facility Construction or building supply yard Contractor’s yard Custom workshop Dwelling unit, accessory Existing salvage yard Fabricating plant Farm implement or heavy equipment sales Marina sales and service establishment Manufacturing plant Machine shop Processing plant Sawmill or planning shop Transportation terminal Warehouse