COURT FILE NO.: CV-19-00624201-0000

DATE: 2019-10-03

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JEFFREY BRODIE, Applicant

AND:

ATTORNEY GENERAL OF ONTARIO, CITY OF TORONTO and ALI GILLANI, Respondents

APPLICATION UNDER Rules 14.03(3)(e), (d), (g), (g.1) and (h) of the Rules of Civil Procedure and s 18(4) of the Cannabis Control Act

BEFORE: Cavanagh J.

COUNSEL: Demar Kemar Hewitt, for the Applicant

Mark R. Crow and Ravi Amarnath for the Respondent Attorney General of Ontario

Brennagh Smith and David Gourlay, for the Respondent, City of Toronto

Caryma Sa’d, for Ali Gillani

HEARD: September 30, 2019

ENDORSEMENT

Introduction

[1] An unlicensed retail business known as CAFÉ, Cannabis and Fine Edibles (“CAFÉ”) was operating at 104 Harbord Street in Toronto selling cannabis products to the general public. Following public complaints, enforcement authorities took steps to try to stop CAFÉ’s illegal cannabis retail operations by issuing notices of contravention, executing search warrants, laying many charges, issuing interim closures, and barring entry to the premises.

[2] After a series of escalating barring mechanisms, and after CAFÉ had repeatedly re-entered the premises and resumed its business after the locks were changed and access was barred, CAFÉ was finally excluded from the premises following a July 2019 interim closure under the Cannabis Control Act, 2017, S.O. 2017, c. 26, Sched. 1 (the “CCA”) that involved placing concrete blocks in front of the entrance.

[3] The owner of the premises, and CAFÉ’s landlord, is the respondent Ali Gillani. Mr. Gillani has been charged for contravening s. 13 of the CCA which provides that no person shall knowingly permit a premises of which he or she is a landlord to be used in relation to an activity prohibited by section 6. Section 6 of the CCA prohibits the distribution of cannabis that is sold, or that is intended to be sold, other than by an authorized cannabis retailer.

[4] The applicant rents rooms on the second floor of the building at 104 Harbord St. There is no separate entrance to the rooms that the applicant rents. As a result of the interim closure of the premises at 104 Harbord St. and the barring of entry to these premises pursuant to the CCA, the applicant is unable to gain access to the residential rooms that he rents from Mr. Gillani.

[5] The applicant brings this application for an order pursuant to s. 18(4) of the CCA that entry to the premises cease to be barred. Section 18(4) provides that such an order may be made, subject to any conditions specified by the court, if the court is satisfied that the use to which the premises will be put will not contravene the provision of the CCA to which the charge that led to the closure of the premises relates.[^1]

[6] For the following reasons, the application is dismissed.

Background Facts

Retail cannabis storefront licensing

[7] Presently in Ontario, members of the public may purchase legal cannabis online through the government-owned and operated Ontario Cannabis Store or in-person at a private licensed retailer’s storefront location. The Alcohol and Gaming Commission of Ontario (“AGCO”) licenses the private storefront locations pursuant to the Cannabis License Act, 2018 (the “CLA”). The sale or distribution of cannabis in Ontario other than by an authorized cannabis retailer is prohibited under s. 6 of the Cannabis Control Act, 2017 (the “CCA”).

104 Harbord St.

[8] The property known municipally as 104 Harbord St. (the “Premises”) is a two-story building zoned for commercial and residential use located on the north side of Harbord Street. Mr. Gillani became the sole registered owner of the Premises on October 17, 2017.

[9] The AGCO website lists all locations that have been licensed to operate as a legal cannabis storefront. 104 Harbord St., Toronto, Ontario is not and has never been one of the licensed locations.

[10] There are two known tenants at the Premises: CAFÉ, a commercial tenant, and the applicant, a residential tenant.

CAFÉ operations

[11] CAFÉ began operating an illegal cannabis storefront at the Premises in January 2018. The front of the building, facing out to Harbord Street, has signage that says “CAFÉ”. Once inside the front door, there is a small area used as a coffee shop. There is one cannabis sale room on the ground floor behind the coffee shop area and a second cannabis sale room on the second floor. Beyond the first floor sale room is another door which exits into an office area. Beyond that office is a door to the exterior of the building, which now opens into a new construction area.

The residential unit

[12] The residential unit consists of three rooms (including the washroom) on the upper floor of the Premises. The applicant occupied the residential unit pursuant to a lease agreement with the respondent Mr. Gillani. The applicant took possession of the residential unit on April 1, 2018 and his lease is for a two-year term that is valid and effective until March 31, 2020. The monthly rent is $1,000.

[13] The only access to the second floor of the Premises is via an open staircase located within the coffee shop on the ground floor. There is no door at the bottom or top of the main stairs. At the top of the main stairs, the first door enters into the applicant’s bedroom. Adjacent to the main stairs is a small hallway that includes two further doors: behind the first is a washroom and behind the second is the second floor sale room.

[14] The Applicant’s rental unit is comprised of a bedroom, which has a smaller separate room located off the back of the bedroom, and a second floor washroom. There is no kitchen. CAFÉ was operating a second floor cannabis sale room down the hallway past the applicant’s two rooms. The applicant also has access to the garage at the back of the Premises where he stored some of his painting and contractor tools.

[15] The applicant does not have a separate entrance or exit; his only means of access to and from his residence is via the front door and the main stairs. The applicant has no access to the ground floor back door, which is accessed through the commercial office space and requires a key.

Enforcement history at the premises

[16] Following public complaints regarding CAFÉ’s operations (received in January and June 2018), City of Toronto municipal standards officers carried out inspections pursuant to the City’s Zoning By-Law and the Planning Act.

[17] Pursuant to section 21 of the CCA, a power of a police officer under the CCA, other than a power of arrest without warrant, can also be exercised by a person designated for this purpose. The City’s Municipal Licensing and Standards division includes a team of provincial offenses officers who have been designated under s. 21 of the CCA. The team is named the Cannabis Enforcement Unit (the “CEU”). The CEU has been working in coordination with the Toronto Police Service (“TPS”) to address the proliferation of illegal cannabis storefronts in Toronto.

[18] Since October 17, 2018, there have been many enforcement actions by TPS and the CEU aimed at stopping CAFÉ’s illegal operations. Specifically:

(a) three Notices of Contravention have been delivered to Mr. Gillani and six separate search warrants have been executed at the Premises, each time resulting in charges being laid against CAFÉ employees;

(b) Mr. Gillani has been charged three times under the CCA;

(c) three interim closures were issued orally by the TPS;

(d) three further interim closures were issued in writing by the CEU; and

(e) with each interim closure, various locking mechanisms were installed in an effort to bar entry to the Premises. Each time the barring mechanisms were breached, and CAFÉ resumed its illegal operations in contravention of the interim closures.

[19] On July 9, 2019 the CEA executed the sixth search warrant at the Premises with the assistance of TPS. Cannabis and currency were seized, and employees of CAFÉ were charged under the CCA. CEU issued a third written interim closure in the form of a Notice of Immediate Closure (“NIC”) which was posted on the inside of the front door of the Premises. The NIC applies to the entire Premises. Entry to all entrances was barred. On that day, Mr. Gillani was charged under the CCA for the third time (he was previously charged on November 20, 2018 and on December 8, 2018).

[20] On July 17, 2019, CEU received information that the Premises had re-opened for business. The CEU and TPS attended (outside of CAFÉ business hours) to re-bar entry. The applicant was inside with another male. More illegal cannabis and currency was seized. The premises were re-barred and, in addition to using a locksmith to bar all of the doors, concrete blocks were also used to block the front entrance entirely as well as the east pathway opening to the back of the Premises.

[21] Later in the day on July 17, 2019, concerned neighbours complained to the CEU that CAFÉ sales appear to be continuing by way of a shuttle service and that non-City contractors appeared to be removing the concrete blocks that the CEU had installed to bar entry. The affiant who provided affidavit evidence on behalf of the City, Lynsey Bourne, appended as an exhibit to her affidavit an email and photograph sent to her by a neighbouring resident. The photograph appears to show a large flatbed vehicle and a crane on the street adjacent to the Premises with two of the large concrete blocks having been removed from the entrance to the Premises and placed on the truck.

[22] On July 19, 2019 CEU and TPS officers attended the Premises to replace the concrete blocks that had been removed without authorization. Entry was re-barred.

[23] Since July 19, 2019, the City has received information the tables and canopies have been set up on the sidewalk outside of the Premises and it appears that the illegal sale of cannabis is continuing from the sidewalk and/or a nearby alleyway. The City’s evidence is that sidewalk sales are ongoing (as of September 2019).

Retrieval of applicant’s personal property

[24] On July 9, 2017 when entry to the premises was barred, the applicant was allowed to take some of his personal belongings. The applicant was at the premises on July 26, 2019. He did not take his remaining possessions that day. The applicant explained that he had no place to store his belongings. On July 26, 2019, upon receipt of the applicant’s initial materials for this application, the City offered to consider whether the applicant’s desire to retrieve further personal property from the Premises constituted exigency circumstances such that re-entry could be made for that purpose under section 18(3.2) of the CCA. On August 26, 2019, the applicant responded and indicated a desire to re-enter the Premises in order to retrieve certain personal belongings, specifically, clothing and work tools. The City requested further details regarding the work tools including what they were and why they were required on an exigent basis, but these details were not provided. The City’s evidence is that it was unable to assess whether sufficient grounds existed to exercise the exigent circumstances exception in the CCA.

[25] On September 10, 2019, the City offered to enter into a consent order to lift the interim closure for the purpose of allowing the applicant to return to the Premises to retrieve and remove all of his personal belongings and the City remains willing to do so. At the hearing of this application, the applicant’s counsel agreed that this offer had been made. Counsel submitted that the applicant still did not have a place to store his work tools and belongings.

Analysis

Application for an order pursuant to s. 18(4)(a) of the CCA

[26] In his Amended Notice of Application, the applicant makes application for an order granting him interim and final access to the residential unit located at 104 Harbord Street pursuant to s. 18(4) of the CCA.

Relevant provisions of the CCA

[27] Section 6 of the CCA provides:

(1) No person shall sell cannabis, other than an authorized cannabis retailer.

(2) No person shall distribute cannabis that is sold, or that is intended to be sold, other than by an authorized cannabis retailer.

[28] Subsections 18(1), (2), (3), (3.1), and (3.2) of the CCA provide:

(1) If a charge is laid against a person for a contravention of any of the following provisions, and a police officer has reasonable grounds to believe that a premises was used in the alleged contravention, the police officer may cause the premises to be closed immediately and any persons on the premises to be removed:

1. Section 6.

2. Paragraph 10(1)(a) or (c) of the Cannabis Act (Canada).

3. Subsection 10 (2) of the Cannabis Act (Canada), in relation to the selling of cannabis contrary to para. 10 (1) (a) or (c) of that Act.

(2) If a charge is laid against a person for contravention of section 13, a police officer may cause the premises that is the subject of the alleged contravention to be closed immediately and that any persons on the premises be removed.

(3) If a premises is closed under subsection (1) or (2), a police officer shall bar entry to all entrances to the premises until the final disposition of the charge, subject to an order under subsection (4).

(3.1) Until the final disposition of the charge, no person shall enter or attempt to enter a premises that is closed under subsection (1) or (2), subject to an order under subsection (4).

(3.2) Subsections (3) and (3.1) do not apply with respect to the entry, in exigent circumstances, of police officers or other emergency responders.

[29] The interim closure dated July 9, 2019 was issued pursuant to s. 18(2) of the CCA upon the owner of the Premises, Mr. Gillani, having been charged for contravening s. 13 of the CCA. Section 13 of the CCA provides:

13(1) No person shall knowingly permit a premises of which he or she is a landlord to be used in relation to an activity prohibited by section 6.

(2) It is a defence to a charge under subsection (1) that the defendant took reasonable measures to prevent the activity.

(3) In this section,

“landlord” means, in respect of a premises, a person who has a lessor, owner or person permitting the occupation of the premises, and includes an owner of a premises that has not been vacated by the tenant despite the expiry of the tenant’s lease or right of occupation.

[30] The barring of entry to premises under s. 18(2) of the CCA is subject to s. 18(4) which provides:

(4) On application by a person who has an interest in the premises, the Superior Court of Justice may order that entry to the premises cease to be barred, subject to any conditions specified by the court, if,

(a) the court is satisfied that the use to which the premises will be put will not contravene the provision referred to in subsection (1) or (2) to which the charge relates; and

(b) if the applicant is the person charged, the applicant posts a cash bond for $10,000 or such greater amount as the court may specify, for the term specified by the court, to ensure the premises will not be used in contravention of that section.

Has the applicant shown that the use to which the Premises will be put if an order is made under s. 18(4)(a) of the CCA will not contravene s. 13 of the CCA?

[31] The CCA provides in s. 18(3) that if a premises is closed under subsection 18(1) or (2), a police officer shall bar entry to all entrances to the premises until the final disposition of the charge, subject to an order under subsection (4). Section 18(3.1) provides that until the final disposition of the charge, no person shall enter or attempt to enter a premises that is closed under subsection (1) or (2), subject to an order under subsection (4).

[32] Therefore, in order for the applicant to enter the Premises, he must bring an application for an order under s. 18(4)(a) of the CCA that entry to the Premises cease to be barred to allow him entry to the residential unit at the Premises. The issue on this part of the applicant’s application is whether the applicant should be granted such an order.

[33] The City accepts that the applicant has a leasehold interest in the residential unit in the Premises pursuant to his lease agreement. I am satisfied that the applicant has status under section 18(4) of the CCA to bring this application. Section 18(4)(b) is not applicable because the applicant has not been charged with any offence under the CCA.

[34] I am also satisfied that the applicant intends to continue his occupation of the residential unit at the Premises as a private dwelling and that he does not intend to become involved in the operations of the cannabis retail store.

[35] The applicant has the burden of satisfying the court on a balance of probabilities that the use to which the Premises will be put if an order is made under s. 18(4)(a) of the CCA that entry to the premises cease to be barred will not contravene s. 13 of the CCA.

[36] The applicant’s evidence is that he has not been involved in any of the activities at the Premises that the City alleges were in contravention of the CCA and that he has no personal knowledge of the operation or operators of the cannabis retail store. This evidence was not successfully challenged on this application and I accept it.

[37] The applicant submits that the evidence supports a finding that CAFÉ has moved on and that it is unlikely to resume its retail operations involving the unlicensed sale of cannabis products. The applicant relies on evidence that CAFÉ is now operating from the sidewalk and using mobile operations. I do not accept that this evidence is sufficient to prove that CAFÉ is unlikely to resume its unlicensed business at the Premises, with the permission of Mr. Gillani, if the concrete blocks are removed. The evidence shows that the owners or operators of the CAFÉ business have repeatedly re-entered the Premises after locks were changed and that they were not stopped from doing so by Mr. Gillani. The operators of the CAFÉ business went so far as to remove the concrete blocks when the City took this step to prevent CAFÉ from reopening. The strong inference that I draw from this evidence is that the operators of the CAFÉ business remain determined to resume its business at the Premises, and that any charges or other enforcement actions taken by the City are simply regarded as a cost of doing business.

[38] The applicant also relies on evidence introduced through his supplemental affidavit “that on August 21, 2019, the Alcohol and Gaming Commission of Ontario (AGCO) notified the operators of the cannabis store at 104 Harbord Street that they have been selected by way of lottery to apply for a retail operator license and a retail store authorization”. The applicant provided evidence that as of September 16, 2019, a numbered company, 11180673 Canada Inc. (“11180673”), is listed in publicly available AGCO records as the applicant (selected by lottery) for these licenses at a proposed store address of 104 Harbord Street. The fact that 11180673 was selected to apply for the licence and authorization is not contentious.

[39] The AGCO notice states that the selected applicants “met pre-qualification requirements”. The “Fact Sheet” that is part of the AGCO notice states that the pre-qualification requirements include “confirmation from a bank, credit union or caisse populaire that the applicant has the financial capacity to obtain $250,000 in cash or cash equivalents; confirmation from a bank, credit union or caisse populaire that the applicant can obtain a Standby Letter of Credit in the amount of $50,000 within five business days of being notified of their selection; confirmation that the applicant has secured a suitable retail space, which will be available to them for operating a cannabis retail store no later than October 2019”.

[40] The evidence tendered by the applicant with respect to the selection of 11180673 to apply for a licence and authorization to operate a retail cannabis store was objected to by the respondents on the basis that the affidavit was delivered after cross-examinations had been conducted and, accordingly, leave is required pursuant to rule 39.02(2) of the Rules of Civil Procedure. I granted leave at the hearing of the application for the evidence to be admitted. The respondents did not request an adjournment to provide responding evidence or to cross-examine on this affidavit. I disregard those portions of the affidavit that consist of argument.

[41] The applicant submits that the evidence shows that the AGCO pre-qualification requirements include a requirement that the applicant meets a “fit-and-proper” test, and that satisfaction of this requirement shows that the concerns raised by the City about the character and history of persons connected to the cannabis retail store, and the likelihood that granting access to the Premises to the applicant will lead to further contraventions of the CCA, have been addressed. The applicant submits that I should infer that 11180673 is not related to the owners or operators of the CAFÉ business, 11180673 intends to comply with the CCA, and CAFÉ will not resume its illegal business from the Premises if an order is made under s. 18(4) of the CCA.

[42] These inferences are not reasonably available to me on the evidence. First, it is not clear who is operating the CAFÉ business. I note that the applicant’s affidavit states that “the operators of the cannabis store” at the Premises were selected in the lottery. I read this statement to be a reference to the operators of the CAFÉ business. It is not possible for me to infer that 11180673 is unrelated to the operators of the CAFÉ business. Second, the evidence is that 11180673 was selected to be allowed to apply for a retail operator licence and a retail store authorization to operate a proposed cannabis retail store. There is no evidence that 11180673 has satisfied the required eligibility requirements for this licence and authorization. These eligibility requirements will be considered on an application for the necessary licenses, and it is not open to me to draw an inference that 11180673 has complied with the eligibility requirements.

[43] I am not satisfied that the fact that 11180673 was selected by lottery to apply for the retail operator licence and retail store authorization leads to a reasonable inference that AGCO is satisfied that 11180673 is a fit and proper person to operate a cannabis retail store or that CAFÉ will not resume its illegal cannabis business if an order is made under s. 18(4) of the CCA. Such an inference would be pure speculation on my part.

[44] The evidence is clear that the operators of CAFÉ have repeatedly taken steps to resume carrying on a business involving the illegal retail sale of cannabis products at the Premises even after the locks were changed, and, on one occasion, even after concrete blocks had been installed as a barrier to prevent access to the Premises. On the evidence before me, this was done without Mr. Gillani, the owner and landlord of the Premises, having taken any steps to stop the operators of the CAFÉ business from re-entering and resuming the illegal sale of cannabis products. CAFÉ has continued to operate its business from the sidewalk outside of the Premises. The applicant has not tendered evidence that he is able to stop the operators of the CAFÉ business from again re-entering the Premises and resuming the unlawful sale of cannabis products to the public.

[45] The applicant submits that he would agree to conditions that he not give keys to the Premises to the operators of the CAFÉ business and that he would alert the City if CAFÉ resumed its operations at the premises. There is no evidence that the applicant gave keys to CAFÉ on other occasions where the locks were changed, so it appears that on these occasions CAFÉ simply changed the locks using the services of a locksmith, with the apparent permission of Mr. Gillani. The conditions proposed by the applicant are not sufficient to satisfy me that if an order is made that the Premises cease to be barred to the applicant, the use to which the Premises will be put will not contravene s. 13 of the CCA.

[46] Mr. Gillani did not file any affidavit evidence in response to this application, and he had no obligation to do so. At the hearing of the application, counsel appeared for Mr. Gillani. Counsel submitted that Mr. Gillani would agree to re-key the Premises and give a key only to the applicant, and that he does not intend to permit CAFÉ to resume its business from the premises. The respondents are not satisfied with this assurance and they continue to oppose the order sought under s. 18(4). Given the evidence that CAFÉ was repeatedly permitted to re-enter the Premises and resume its unlawful sale of cannabis products even after locks were changed, I am not satisfied that the assurances given by Mr. Gillani given through his counsel can be relied upon and will prevent CAFÉ from resuming its operations if the order sought by the applicant is granted. I note that the applicant did not seek to examine Mr. Gillani as a witness on this application to elicit evidence about the specific steps that he would commit to take to ensure that CAFÉ did not resume operations if an order under s. 18(4) were to be made.

[47] The applicant introduced evidence of his personal circumstances, including that without access to his tools he is not able to earn income to fund payment of a deposit for rental of other premises in the area. The applicant’s evidence is that he relies on the generosity of others to provide him with short-term accommodation, and he sometimes is forced to sleep on the street. This evidence may be relevant to the issues raised on the applicant’s application to challenge the constitutionality of certain provisions of the CCA and related legislation. This evidence does not, however, address the statutory requirements which must be satisfied for an order under s. 18(4) of the CCA to be made.

[48] The source for the relief sought on this part of the application is statutory, not equitable and, for this reason, factors that may be considered on a motion for an equitable injunction would be of limited, if any, application: See Kenora (City) v. Eikre Holdings Ltd., 2018 ONSC 7635 at paras. 40-41 and authorities cited.

[49] I recognize that the applicant is in difficult circumstances because of the actions taken under the CCA to bar all entrances to the Premises. However, the applicant has failed to discharge his onus under s. 18(4)(a) of the CCA of satisfying me that if an order is made that entry to the Premises cease to be barred, the use to which the Premises will be put will not involve resumption of CAFÉ’s illegal business, with the permission of Mr. Gillani, contrary to s. 13(1) of the CCA.

Disposition

[50] For these reasons, the application for an order under s. 18(4)(a) of the CCA is dismissed.

[51] The respondents do not seek costs.

Cavanagh J.

Date: October 3, 2019

[^1]: In his application, the applicant also challenges the constitutionality of provisions of the CCA and related legislation, and this part of the application is scheduled to be heard in January 2020.