COURT FILE NO.: CV-21-0153

DATE: 2021 12 14

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Silvana Laska and Ferit Caushaj

v.

Wellington North (Township)

BEFORE: MANDHANE J

COUNSEL: R. Bennett and T. Friedman for the Plaintiffs, Applicants, Appellants

P. Kraemer and P. Liao for the Defendant, Respondent

HEARD: December 3, 2021

ENDORSEMENT

[1] On December 3, 2021, the parties appeared before me on the Applicants’ motion for an interim injunction restraining the Respondent from enforcing two municipal by-laws against them. After hearing lengthy submissions, I granted the injunction with written reasons to follow. These are those reasons.

OVERVIEW

[2] The Applicants, Silvana Laska and Ferit Caushaj, both suffer from chronic pain, skin conditions, and mental health disabilities. They have tried conventional therapies to treat their symptoms but say that their pain is best managed by using cannabis, in the form of flower, oil and cream.

[3] The Applicants have prescriptions for medical cannabis. Pursuant to the federal Cannabis Regulations, SOR/2018-144, between July and August 2021, the Applicants registered with Health Canada to grow their own cannabis for medical use. Together, the Applicants are authorized to grow 1402 cannabis plants at 565 Perth Street, Mount Forest, in Wellington County North (“the site”). The Health Canada registrations are site-specific and require that the cannabis produced be solely used for personal, medical consumption.

[4] Ms. Laska bought the site in September 2020 and took possession in November 2020. Mr. Caushaj rents space from Ms. Laska. Ms. Laska grows cannabis for herself and her brother, Elton Laska, while Mr. Caushaj grows cannabis for himself. Throughout 2020 and 2021, the Applicants undertook significant renovations to the site without the proper building permits.

[5] The Township of Wellington County North (“the Township”) inspected the site on August 23, 2021. Photos from the inspection show a sophisticated hydroponic growing operation with specialized equipment including enhanced electrical capacity, multiple cooling units, specialized lighting, soil and fertilizer, plants in different stages of growth, and cannabis flower in various stages of curing.

[6] The day after the inspection, the Township issued a Notice of Contravention of Zoning By-Law 66-01. The Township says that the Applicants cannot cultivate cannabis on the site because it is zoned “industrial”. The site abuts a local waste transfer center, and the current zoning permits, for example, operating a scrap yard, abattoir, or manufacturing facility. The Township says that the current zoning does not allow for agricultural use and that they are not prepared to change the zoning for the site to allow cannabis production.

[7] After commencing enforcement action against the Applicants, on September 27, 2021, the Township passed an interim control by-law (By-Law 092-21) which prohibits cannabis production until September 27, 2022 while the Township studies the issue. The interim cannabis by-law includes an exception for personal-use cultivation limited to four plants per residential household but does not include any exceptions for medicinal cannabis production.

[8] Rather than comply with the Township’s demand that they effectively cease growing cannabis on the site, the Applicants apply to this court for relief. They say that the current zoning for the site allows production of medicinal cannabis. In the alternative, they seek a declaration that the Township’s zoning by-law and interim cannabis by-law both violate their s. 7 Charter right to access medical cannabis. A hearing on the merits is scheduled for the February 2022 trial sittings.

[9] Before me, the Applicants seek an interlocutory injunction restraining the Township from enforcing the two by-laws. They wish to continue growing and processing cannabis at the site pending final disposition of their application. The Respondent opposes the injunction and intends to take prompt enforcement action if the injunction is not granted.

ISSUES

[10] The issues that I must determine are as follows:

a. Are the Applicants barred from seeking injunctive relief based on the “clean hands” doctrine?

b. Will the Applicants suffer irreparable harm if the injunction is not granted?

c. Is this a clear case where the balance of convenience favours granting the injunction?

d. Are the Applicants entitled to costs?

ANALYSIS

Does the “clean hands” doctrine apply to bar the Applicants’ claim for injunctive relief?

[11] As a preliminary issue, the Township says that the clean hands doctrine is a complete bar to the Applicants’ claim for equitable relief because the Applicants failed to comply with the legal requirement to obtain a building permit before retrofitting the site for cannabis production: Planning Act, R.S.O. 1990, c. P13.

[12] The Township relies on City of Toronto v. Polai, [1970] 1 O.R. 483, 1969 339 (Ont. C.A.). There, the defendant argued that the clean hands doctrine was a bar to the City’s motion to restrain her from using her property as a multi-family dwelling. The City had taken enforcement action based on the local zoning by-law. The Court of Appeal found that the City had not acted with unclean hands by simply maintaining a list of noncompliant properties for which prosecution was being deferred. It found that maintenance of the list was not directly related to the prosecution of the Applicant and therefore did not engage the clean hands doctrine. The City’s injunction was allowed.

[13] I agree with the Applicants that the doctrine does not apply here. The Applicant, Laska’s, failure to obtain a building permit before retrofitting her site is not directly related to her request for injunctive relief from the zoning by-law and interim cannabis by-law. It also has nothing to do with Mr. Caushaj’s request for injunctive relief.

[14] I am supported in this finding by the fact that the Applicant Laska is currently engaged in an ex-post facto process to come into compliance with the applicable building code. For example, she has produced documents prepared by a licensed architect and licensed electrician.

Will the Applicants suffer irreparable harm if the injunction is not granted?

[15] Having found that the clean hands doctrine does not apply here, I turn to the Applicants’ claim for injunctive relief. To assess the claim on its merits, I must apply the test set out in RJR-McDonald Inc. v. Canada (Attorney General), 1994 117 (SCC), [1994] 1 S.C.R. 311.

[16] Here, the Township concedes that the Applicants have met the first branch of the RJR-McDonald test, namely, that there is a serious issue to be tried. On the second branch, I find that the Applicants will suffer irreparable harm if the injunction is not granted because they will be denied reasonable access to doctor-prescribed medicine.

[17] The unchallenged evidence before me is that the Applicants require between 90 and 99 grams of cannabis per day, whether in the form of flower, oil, or cream. Between today and the hearing in February 2022, I accept that the Applicants would harvest the equivalent of many months’ worth of cannabis for prescribed medical use. The cannabis can only be harvested approximately once every four months because of the growing cycle of the plant.

[18] The Township says that the harm to the Applicants is speculative because the Applicants do not have an established track record of growing medicinal cannabis. While the Applicants do not have past experience producing oils and creams, the cannabis flower is the source of the medicinal elements regardless of the ultimate preparation, and Mr. Caushaj has successfully harvested his plants at least once.

[19] Cannabis provided through the private market is simply too expensive for the Applicants. They suffer from chronic, treatment-resistant conditions and have both been prescribed large quantities of cannabis by their doctor. Their prescriptions include highly-processed and expensive oils and creams. By way of example, Ms. Silva is a server who makes approximately $60,000 per year. Her daily prescription of 5 grams of flower, 20 grams of oil, and 65 grams of cream would cost nearly $4,000 per day from the Ontario Cannabis Store. At that rate, she would have to budget 1.4 million dollars per year for cannabis alone.

[20] If the injunction is not granted, the Applicants would suffer irreparable harm because they would not be able to obtain the amount of daily cannabis they have been prescribed as it would be cost prohibitive to do so: Allard v. Canada, 2014 FCA 298, at paras. 13-14.

Does the balance of convenience weigh in favour of granting the injunction?

[21] Because the zoning by-law and interim cannabis control by-laws are laws passed by duly-elected officials and are designed to promote the public interest, the Applicants must establish that this is a clear case that favours granting injunction relief: Harper v. Canada (Attorney General), 2000 SCC 57, [2000] 2 SCR 764, at para. 9.

[22] I am satisfied that the balance of convenience weighs in favour of the Applicants. First and foremost, given the Applicants’ medical needs and the Township’s concession that there is indeed a serious issue to be tried, I am inclined to err on the side of maintaining the status quo in terms of their access to medicinal cannabis while their application is being decided on its merits.

[23] Second, the Applicants cannot relocate their site in the short term. Their Health Canada authorization is tied to the Mount Forest site. The process to sell the site, acquire another property, obtain new Health Canada authorizations, complete the necessary retrofits, and move their operations, would be lengthy and would not be completed in advance of the February 2022 hearing.

[24] Third, the Applicants would suffer significant financial losses if forced to temporarily move or shutter their site. This would include the plants themselves which cannot be transported during their growing cycle. Moreover, even if they were ultimately successful on the Application, they could not claim damages against the Township as a public body acting in good faith: Allard v. Canada, 2014 FC 280, at para. 88.

[25] Fourth, the current zoning of the site also favours the Applicants. Unlike the situation in Tay (Township) v. Fan, 2018 ONSC 6375, the Applicants are not producing cannabis in a residential area. The site is zoned industrial, far away from neighbours and schools, and minutes from a local police station. The Applicants grow and cure the cannabis plants indoors and do not use the site lands or soil to grow cannabis or any other produce.

[26] Fifth, I find that the Township’s decision to pass the interim cannabis control by-law just days after serving the Applicant with an Order to Comply in relation to the building permit issue was not a mere coincidence. I have real concerns with the Township’s argument that the interim control by-law can somehow be applied retroactively to the Applicants’ site. On the other hand, any proposed new production will not commence prior to the hearing by operation of the interim control by-law.

[27] Sixth, there is no concrete harm to the Township that would flow from granting the injunction. There are no allegations of criminal activity. The OPP was involved in the inspection process and has not laid any charges. There is also no evidence that there have been complaints from neighbours or others.

[28] Finally, the Applicants are engaged in a process with the Township to address any safety concerns related to the site. They have also agreed to an order that the site not be used for residential purposes. There is nothing in the relief sought that would limit the Township’s ability to take action to ensure that the site complies with the building code and safety requirements.

[29] The injunction is granted.

COSTS

[30] The Applicants are entitled to costs on a partial indemnity basis in the amount of $21,873.64, all inclusive. The Applicants’ quantum of costs is reasonable given the complexity and seriousness of the issues at stake, and significantly lower than the amounts claimed by the Township.

[31] This is not an appropriate case to award substantial indemnity costs. Both parties acted reasonably given their genuine, competing interests, both of which engage different aspects of the public interest. The Applicants did not make a proper Rule 49.10 offer by simply asking the Township for its position on interim enforcement.

MANDHANE J

DATE: December 14, 2021

COURT FILE NO.: CV-21-0153

DATE: 2021 12 14

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Silvana Laska and Ferit Caushaj

v.

Wellington North (Township)

COUNSEL: R. Bennett for the Applicants

T. Friedman for

P. Kraemer, for the

P. Liao for

ENDORSEMENT

MANDHANE J

DATE: December 14, 2021