COURT FILE NO.: CV-09-373939

DATE: 20220721

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

1631561 ONTARIO INC., carrying on business under the firm name and style of CZ (THE COMFORT ZONE)

Plaintiff

– and –

CITY OF TORONTO and ADAM VAUGHN

Defendants

Marshall A. Swadron & Sarah M. Latimer & Nima Hoijati, for the Plaintiff

Kevin A. McGivney & Jonathan Thorburn & Parmis Goudarzi-Malayeri & Catherine Tieu, for the Defendants

HEARD: November 15-26, 2021 & December 6-24, 2021

pollak j.

REASONS FOR DECISION

[1] The plaintiff numbered company, 1631651 Ontario Inc. c.o.b. as The Comfort Zone (the “CZ” or “Plaintiff”), was a dance/rave club that operated weekends after the closing times at most clubs. It was located in the basement of a building at 480 Spadina Avenue, just north of College Street, in the City of Toronto.

[2] On March 6, 2009, the Plaintiff started this action against the Defendant, City of Toronto (the “City”) and Mr. Adam Vaughan (“Mr. Vaughn”) for damages for alleged intentional torts of misfeasance in public office, abuse of public office, unlawful interference with economic relations and/or alternatively conspiracy to defame and conspiracy to injure.

[3] The Plaintiff alleges that the defendants conspired with each other and with the Toronto Police Services (“TPS”) collectively by entering into an agreement with the main intention to injure the Plaintiff by closing it down and/or interfering with its business.

[4] The Plaintiff alleges that Mr. Vaughan, various City entities, including Municipal Licensing Standards (“MLS”), Toronto Public Health (“TPH”), Toronto Fire Services (“TFS”), and the TPS, conspired and targeted The CZ with searches and inspections, beyond the scope of their duties, and with the goal of causing The CZ harm.

[5] The defence is that between April 6, 2008, and March 6, 2009, individual employees of the City, with various regulatory responsibilities, conducted inspections of The CZ, employing a standard of reasonableness and often working with The CZ to resolve legitimate health and safety concerns. The CZ was not prevented from carrying on business or required to temporarily cease operations. There is no evidence that patrons at the CZ were deterred from attending as a result of the presence of City employees.

[6] Section 50(1) of the Police Services Act, R.S.O. 1990, c P.15, provides that a police services board is liable for torts committed by police officers in the course of their employment. The City is not legally responsible for the acts of the TPS.

Agreed Statement of Facts

[7] On April 9, 2008, Lorianne Belanger of TFS returned to The Comfort Zone to conduct a re-inspection following the March 28, 2008 Notice of Violation. As of April 9, 2008, The Comfort Zone had remedied 14 of the violations, while 3 remained (JBD, Tabs 232 and 237).

[8] On or about April 15, 2008, MLS issued an order to 693793 Ontario Limited, The Comfort Zone’s landlord and building owner, under the Building Code Act, in respect of nine alleged violations of the Municipal Code concerning 484 Spadina Avenue. The Order stated that 693793 Ontario Limited could appeal the Order by May 5, 2008. The Order further stated that repairs relating to the nine violations had to be completed prior to May 15, 2008, to bring the property into compliance with the prescribed standards (JBD, Tab 109).

[9] On or about April 18, 2008, David Baines of the TEO returned to The Comfort Zone to do a re-inspection of the premises following the April 6, 2008 inspection, which had identified four infractions under the Smoke-Free Ontario Act (JBD, Tab 110).

[10] On or about April 23, 2008, Gary Kendall emailed Adam Vaughan seeking a meeting with Adam Vaughan, together with the general manager, manager, and consultant of The Comfort Zone (JBD, Tab 112).

[11] Adam Vaughan has never attended a meeting with representatives of The Comfort Zone.

[12] On or about May 12, 2008, The Comfort Zone’s architect, Sander Gladstone (“Mr. Gladstone”) and Michael Cooper of the TEO, sent email correspondence to one another (JBD, Tab 264).

[13] On June 4, 2008, MLS issued summons number 71157 to The Comfort Zone in respect of the offence of carrying on the business, trade or occupation of an owner of an entertainment establishment/night club without having the necessary licence so to do, contrary to the Municipal Code. This summons replaced the ticket TA329984 issued on April 6, 2008 (JBD, Tab 95).

[14] On June 11, 2008, Lorianne Belanger of TFS returned to The Comfort Zone to conduct a further inspection. At that time, it was determined that an outstanding issue was close to being completed (JBD, Tabs 232 and 237).

[15] On June 18, 2008, Lorianne Belanger of TFS returned to The Comfort Zone to conduct a final inspection. At that time, it was determined that the March 28, 2008 Notice of Violation was cleared (JBD, Tabs 232 and 237).

[16] On or about June 29, 2008, a further joint inspection of The Comfort Zone was conducted by Anthony Bartolo of MLS, and Sergeant Maisonneuve and Police Constables Correia, Draper, Fritz and Meredith from the TPS (JBD, Tabs 118 and 355).

[17] During the June 29, 2008 inspection, small glass vials were found on the floor throughout the public areas of The Comfort Zone, where drugs were also found. A patron was observed smoking a cigarette inside The Comfort Zone (JBD, Tabs 118 and 355).

[18] On June 29, 2008, MLS charged The Comfort Zone in respect of the offence of carrying on the business, trade or occupation of an owner of an entertainment establishment/night club without having the necessary licence so to do, contrary to the Municipal Code (JBD, Tab 119).

[19] On or about October 14, 2008, summons 71248 was issued relating to the above noted charge (JBD, Tab 119).

[20] On September 27, 2011, Summons 71248 in respect of the offence of operating an entertainment establishment without a licence was withdrawn.

[21] On or about July 3, 2008, The Comfort Zone submitted a cheque to renew its restaurant licence (JBD, Tab 121).

[22] On or about July 17, 2008, Mr. Gladstone met with Michael Cooper, Tobacco Enforcement Officer (“Mr. Cooper”). Thereafter, they exchanged email correspondence regarding the fabric Mr. Gladstone proposed to use to cover the tubular structure on the Silver Dollar’s patio (JBD, Tab 280).

[23] In or about August 2008, Martin Smith, Officer of Mobile Business Investigations at MLS contacted Constable Tajti of TPS to advise that the City was about to re-issue the business licence to The Comfort Zone, as the City lacked any information respecting TPS interest in or enforcement action against The Comfort Zone (JBD, Tab 143).

[24] In response to Martin Smith’s August 2008 contact, Constable Tajti faxed an updated investigation report to Martin Smith (JBD, Tab 143).

[25] On or about August 28, 2008, Richard Mucha of MLS sent a letter to Ralph Berrin of 1631651 Ontario Inc. indicating that an application for licence renewal had been reviewed and the renewal was being denied for the grounds set out in the letter (JBD, Tab 125).

[26] On or about September 29, 2008, The Comfort Zone requested a hearing respecting the City’s refusal to renew The Comfort Zone’s business licence (JBD, Tab 127).

[27] No hearing was ever scheduled in respect of The Comfort Zone’s September 29, 2008 request for a hearing to review the City’s refusal to renew its business licence.

[28] The Comfort Zone’s business licence was never renewed following its July 3, 2008 application.

[29] The Comfort Zone was permitted to operate after September 29, 2008, without any licensing restrictions, on the basis that its request for a hearing to review the refusal to renew its business licence remained pending.

[30] On or about October 26, 2008, during operating hours, a joint inspection was conducted at The Comfort Zone involving numerous members of the TPS and representatives from City agencies and the Electrical Safety Authority (“ESA”), a provincial regulator. Toronto Sun journalist Brett Clarkson was also present.

[31] On or about October 27, 2008, the Toronto Sun published an article by Brett Clarkson titled “Cops crack down on clubs”.

[32] On or about October 27, 2008, Adam Vaughan published on his website an article by Jenny Yuen from the Toronto Sun entitled “Clubs in a Combat Zone”.

[33] On or about October 27, 2008, the ESA issued a Hazardous Investigation Defect Notice to The Comfort Zone, which identified 14 defects that pose serious life and/or fire hazards. The Notice stated that the listed defects had to be corrected by November 9, 2008.

[34] All of the repairs required to remedy the defects identified by the ESA in the October 27, 2008 notice were carried out.

[35] The Comfort Zone paid for the repairs identified in the October 27, 2008 notice.

[36] On or about November 14, 2008, the ESA issued a Certificate of Inspection for The Comfort Zone.

[37] On or about October 30, 2008, Adam Vaughan’s Constituency Assistant, Jennifer Chan sent an email to Joe Magalhaes and Richard Mucha.

[38] On October 29, 2008, Charles Tabone, an area resident, emailed Adam Vaughan to complain about various issues with The Comfort Zone, including noise and issues with patrons of The Comfort Zone.

[39] On or about October 31, 2008, Dale Duncan, one of Adam Vaughan’s constituency assistants, sent a response to Mr. Tabone.

[40] On or about October 31, 2008, Charles Tabone sent an email to Dale Duncan, responding to the above.

[41] On or about December 16, 2008, a pre-trial inspection of The Comfort Zone was conducted by Charles Empringham, and at that time, The Comfort Zone was found to be in compliance with the requirements of the Food Premises regulation.

[42] On or about December 21, 2008, TPS officers attended at The Comfort Zone.

[43] On or about December 24, 2008, Ruth White, Superintendent, 14 Division sent an email to Adam Vaughan.

[44] Superintendent White’s December 24, 2008 email to Adam Vaughan attached a report from Constable Tajti.

[45] On or about December 25, 2008, Angela Kinnear, Adam Vaughan’s Executive Assistant, sent an email to Adam Vaughan.

[46] On or about December 31, 2008, Angela Kinnear sent an email to Richard Butts.

[47] On or about December 31, 2008, Angela Kinnear sent an email to David McKeown forwarding an email by Superintendent White, with attachments, about The Comfort Zone.

[48] On or about December 31, 2008, David McKeown’s assistant sent an email to Jim Chan.

[49] On or about December 31, 2008, Richard Butts (via his assistant) forwarded Angela Kinnear’s December 31, 2008 email to Lance Cumberbatch in which he asked Mr. Cumberbatch to “please investigate/ take any appropriate action” as he sees fit.

[50] On or about December 31, 2008, Jim Hart (via his assistant) sent an email to Richard Mucha.

[51] On or about December 31, 2008, Richard Mucha sent an email to Lance Cumberbatch and enclosed a briefing note.

[52] On or about January 5, 2009, Michael Cooper sent Andrea Davis an email.

[53] On or about January 7, 2009, Charles Empringham sent Andrea Davis an email.

[54] On or about January 11, 2009, during operating hours, a joint inspection of The Comfort Zone was carried out by the TPS, TPH and TEO.

[55] On January 11, 2009, ticket number TB 066469 was issued to The Comfort Zone in respect of the offence of promote sale of tobacco products where sold or offered for sale, contrary to the Smoke-Free Ontario Act.

[56] On or about September 27, 2011, The Comfort Zone was convicted of the above noted offence and was required to pay $615.00. This ticket was subsequently paid by The Comfort Zone.

[57] On January 11, 2009, ticket number TB 066498 was issued to The Comfort Zone in respect of the offence of failure to give notice that smoking is prohibited contrary to the Smoke-Free Ontario Act.

[58] On or about September 27, 2011, The Comfort Zone was convicted of the above noted offence and was required to pay $615.00. This ticket was subsequently paid by The Comfort Zone.

[59] On January 11, 2009, ticket number TB 066499 was issued to The Comfort Zone in respect of the offence of failure to post a “no smoking” sign contrary to the Smoke-Free Ontario Act.

[60] The ticket bearing number TB 066499 was subsequently withdrawn.

[61] In the course of the joint inspection on January 11, 2009, Jeff Henderson of TPH brought potential public health deficiencies to Chris Rando’s attention without issuing offence notices.

[62] On or about January 13, 2009, Mr. Henderson returned to complete a re-inspection of The Comfort Zone.

[63] At the time of Mr. Henderson’s re-inspection on January 13, 2009, The Comfort Zone had rectified the potential deficiencies brought to Mr. Rando’s attention on January 11, 2009.

[64] On or about January 14, 2009, Mr. Henderson served summonses on The Comfort Zone as follows:

a) Summons number TB065417 in respect of the offence of fail to protect food from contamination or adulteration as required by section 26 of the Ontario Food Premises Regulation 562/90 under the Health Protection and Promotion Act on January 11, 2009. On or about September 27, 2011, The Comfort Zone was convicted of the above noted offence and was required to pay $615.00. This ticket was subsequently paid by The Comfort Zone.

b) Summons number TB065418 in respect of the offence of fail to provide thermometer in storage compartment as required by section 21 of the Ontario Food Premises Regulation 562/90 under the Health Protection and Promotion Act on January 11, 2009. This ticket was subsequently withdrawn.

c) Summons number TB065419 in respect of the offence of fail to remove garbage when necessary to maintain sanitary condition as required by section 57(1) of the Ontario Food Premises Regulation 562/90 under the Health Protection and Promotion Act on January 11, 2009. This ticket was subsequently withdrawn.

d) Summons number TB065420 in respect of the offence of operate food premises maintained in manner adversely affecting sanitary condition as required by section 11(a)(ii) of the Ontario Food Premises Regulation 562/90 under the Health Protection and Promotion Act on January 11, 2009. This ticket was subsequently withdrawn.

[65] Mr. Vaughan was elected to Toronto City Council in November 2006, as Councilor for Ward 20, Trinity-Spadina. As a City Councillor, Mr. Vaughan became aware of the CZ and the issues of concern which area residents associated with the CZ. He testified that concerns were raised with him during door-to-door campaigning in the neighborhood.

[66] The evidence about the Plaintiff’s business was that before March 2008, CZ was a profitable business, a premier destination in the Toronto and international electronic dance/house (“EDM”) music scenes. It operated outside the hours of dance clubs. CZ had a loyal following of patrons and was very busy before the execution of the search warrant by the TPS on March 16, 2008. The evidence was that CZ took efforts to curb unlawful activity through having a single point of entry, security searches prior to entry, banning of weapons, alcohol, drugs, sharps and outside food and drink, presence of security staff, use of security cameras and refusing entry to or removing those who broke rules. Although CZ was stricter than other clubs, its efforts to curb unlawful activity could not prevent unlawful activity that occurred outside CZ in the neighbourhood of Spadina and College.

[67] CZ was zoned in a mixed commercial residential area as a restaurant use. CZ shared a building with The Waverly Hotel and the Silver Dollar (“SD”), both under separate ownership. To its north on Spadina was the Scott Mission, a homeless shelter. To its north and west of the Scott Mission, separated by a laneway, was Lord Lansdowne Public School and its playground. The hours of CZ and SD did not overlap with school hours;

[68] The evidence was that there were several businesses and institutions at the intersection of Spadina Avenue and College Street, other than CZ, that generated complaints from the community and/or police calls to service: The Waverly Hotel and the Scott Mission on Spadina; Rancho Relaxo Lounge and an after-hours illegal “booze can” on College; the Centre for Addiction and Mental Health College Site (previously the Clarke Institute and Addiction Research Foundation) on the east side of Spadina, as well as housing used by University of Toronto students. There were community complaints which included finding discarded needles. The community complaints regarding the CZ were periodic, interspersed by periods of relative calm.

[69] Mr. Vaughan’s defence is that he was mandated to represent the public and to consider and advocate for the well-being and interests of his constituents. As he responded to community complaints and concerns, in fulfilment of his statutory responsibilities, he performed his duties appropriately. The City raises the same defence for its agencies. The Defendants submit that the Plaintiff has not introduced any evidence that the Defendants conspired and/or directed the TPS to undertake any inappropriate actions related to the CZ.

[70] All of the Defendants submit that it is expected and appropriate for public agencies to cooperate with each other to deal with issues they are responsible to address. City Councillors, much like all elected politicians, appropriately take steps to address the concerns and interests of their constituents. The Defendants submit that the Plaintiff has failed to prove that any City employee involved with the CZ, or Mr. Vaughan, acted in bad faith, with malice, or for an improper purpose outside their scope of their legitimate functions and duties. For the reasons I discuss below, I agree with this assessment of the evidence.

Actions of the Toronto Police Service

[71] CZ was located within the boundaries of 14 Division of TPS (“14 Division”), the Divisional Commander of which was Superintendent Ruth White. On January 27, 2008, 26-year-old Andrew Fazio passed away at his home in Hamilton from an overdose caused by illegal drugs purchased at an unknown location. There was no evidence linking the drugs that caused Mr. Fazio’s death to CZ. There was a Hamilton police investigation into Mr. Fazio’s death.

[72] On January 31, 2008, Mr. Fazio’s mother called Mr. Vaughan’s office regarding her son’s death, asking for the office’s assistance in investigating her son’s death.

[73] It is alleged that the end objective of the TPS investigation initiated in February 2008 and subsequent acts by TPS was to close CZ. After January 2008, TPS initiated increased enforcement in the area around The Comfort Zone. After January 2008, TPS initiated regular walk-throughs of the CZ.

[74] The TPS executed a search warrant for CZ on March 16, 2008, with 90 police officers, the Emergency Task Force, OPP Biker Enforcement Unit and an officer wearing an RCMP jacket. There was evidence of the extent of the use of force, involving rough handling, pointing of semi-automatic firearms and injuries to some staff and patrons. Security cameras were broken or disabled, feeds cut and digital recording system broken. The TPS questioned and searched approximately 150 people, many held in handcuffs or zip ties, who were then released without charge after 4 to 5 hours. The interior doors of CZ were forced open, breaking both the doors and the door frames. Over $35,000 was seized in cash, licenses, permits and the occupant limit card framed behind the bar before the raid went missing. As well, there was physical damage to other property – walls, ceilings, ventilation, light fixtures, motion detectors, shelves, upholstery on benches.

[75] TPS publicized the raid in news releases and held a press conference, resulting in media coverage. TPS organized a follow up of joint inspections attended by many officers and by regulatory enforcement agencies. It is alleged that TPS brought Toronto Sun journalist Brett Clarkson with them on the October 26, 2008 joint inspection, which resulted in sensationalized stories being published regarding CZ. After March of 2008 until 2013, TPS engaged in frequent walk-throughs of CZ during business hours. Further, TPS frequently stationed a police cruiser or cruisers in front of CZ during operating hours and patrons and sometimes staff were questioned on their way in or out. In early 2013, TPS gave notice of civil forfeiture proceedings against CZ’s landlord, threatening to seize the Spadina Avenue property to bring about the closure of the CZ.

[76] There were other establishments in the surrounding area that required police presence. Sgt. Zammit testified that he would attend in the area respect of patrons that frequented The CZ and the parking lots around The CZ. He also testified that police presence was required in respect of activities associated with the Waverly Hotel, and other nearby locations. Accordingly, police presence in the vicinity of The CZ was not only related to The CZ.

[77] Witnesses for the Plaintiff testified to either observing drug use in The CZ, or observing remnants of drug use.

[78] Mr. Yarmus, Mr. Rando and others agreed that one reason for the two part security search was to look for drugs. Before the incorporation of 1631651 Ontario Inc., a customer was charged with possession of drugs, resulting in a hearing and the decision not to continue their Liquor License after it was suspended.

[79] Mr. Rando, the general manager of The CZ, confirmed that drug use did happen at The CZ. Further, Mr. Restituto Dellosa, the former bar back of The CZ, testified that he was aware of customers doing drugs inside the venue, and he would sometimes see signs of drug paraphernalia, including empty bags and vials on the floor. Mr. Korosh Bashal, former security guard at The CZ, also testified that he observed drugs in The CZ. Ms. Louise Mayhew, former bartender at The CZ, also testified that she saw drug use by customers on occasion.

[80] Ms. Robin Civiero, another former bartender at The CZ, was asked on occasion for drugs by patrons. Mr. Anthony Lacquaniti testified that a security guard employed by The CZ was found selling drugs to patrons and terminated. Mr. Michael Babb, the resident DJ of The CZ, was also aware of drug use inside The CZ, and testified that there was an association between EDM music and the club drug MDMA.

[81] The Plaintiff relies on TPS enforcement activity but there is no factual or legal basis to support the submission that either Mr. Vaughan or the City were responsible for anything done by the TPS. There is no evidence to support any argument that the Defendants caused anything arising out of the execution of the search warrant. If tortious activity could be proven against a TPS officer, pursuant to section 50(1) of the Police Services Act, then statutory liability for such actions rests with the TPSB and not the City or Mr. Vaughan.

[82] The Plaintiff led no evidence from any patron or former patron of The CZ establishing a concern about attending The CZ for any reason. There was no evidence suggesting any impact on attendance at The CZ due to any inspections undertaken by City employees. Nor was there any evidence of any impact on the attendance numbers at The CZ caused by Mr. Vaughan

[83] To the extent the Plaintiff alleges the TPS damaged its premises during the execution of the search warrant, the Defendants are not liable for those damages.

TPS attendances

• On or about May 24, 2013, a “common place” search, conducted of TPS databases, where the Comfort Zone was mentioned, contains 114 entries between March 16, 2008 and May 24, 2013 mentioning the CZ.

• TPS Occurrence 4254040 indicates that TPS investigated “Accidental Overdose” at 480 Spadina Avenue, Comfort Zone, on or about April 15, 2012.

• TPS Occurrence 4802881 indicates that TPS investigated “Accidental Overdose” at 480 Spadina Avenue, Comfort Zone, on or about November 24, 2012.

• TPS Occurrence 4768379 indicates that TPS investigated a “Sudden Death” inside The Comfort Zone on or about March 29, 2013.

• TPS Occurrence 4913980 indicates that TPS investigated an “Accidental Overdose” at 480 Spadina Avenue, Comfort Zone, on or about March 31, 2013.

• TPS Occurrence 4934484 indicates that TPS investigated an “Accidental Overdose” at 480 Spadina Avenue, Comfort Zone, on or about April 7, 2013.

• TPS Occurrence 4911635 indicates that TPS investigated an “Accidental Overdose” at 480 Spadina Avenue, Comfort Zone, on or about May 5, 2013.

• As I have already noted above, as TPS is not a Defendant, unless the conspiracy allegations are proven, the Defendants are not liable for any of the actions of the TPS.

[84] There was not much conflict in the evidence. The only conflict was the characterization of the events in evidence.

Claims against Mr. Vaughn

[85] The Plaintiff claims that following the execution of the search warrant on CZ by TPS on March 16, 2008, Mr. Vaughan acting in bad faith, did everything he could to shut down CZ.

[86] The following is a summary of the allegations against Mr. Vaughn:

• He wrote the “Good News Bad News” email containing defamatory content, which he circulated to those on the Ward20 email distribution list, with a request that it be circulated further to neighbours and other interested parties. The Harbord Village Residents Association (“HVRA”) circulated it to its membership, copying Mr. Vaughan, and then published it on its public website.

• Mr. Vaughan pressured CZ’s landlord, Wynn Family Properties, to find a way to evict the CZ immediately, and made it a pre-condition to obtain his support for the pending Dupont development or of any future development of the Spadina property.

• Mr. Vaughan refused to meet with CZ representatives or hear its side of the story. Mr. Vaughn’s evidence is that he was hesitant to meet with the CZ as a result of the police investigation. He insisted that any meeting held with CZ representatives would first have to be cleared with Superintendent White and would be in the presence of the police. Mr. Vaughan or his office investigated steps to use the public nuisance provisions in the City of Toronto Act to close CZ. Mr. Vaughan disregarded the invitation of Silver Dollar’s architect and agent to discuss any questions or concerns regarding the Silver Dollar patio variance application on the basis that he had a “social issue” with the application, not an “architectural issue”.

• Mr. Vaughan wrote the July 8, 2008 letter to the Committee of Adjustments regarding the Silver Dollar patio variance application containing defamatory content respecting CZ. Mr. Vaughan or his office investigated opportunities to make submissions to the Licensing Tribunal respecting the CZ’s appeal of the refusal to renew its licence. During his two terms in office, Mr. Vaughan did not seek to revoke the licenses of any other businesses in his ward, subject possibly to a rooming house. Mr. Vaughan moved to engage the City Solicitor’s office to oppose the Silver Dollar’s appeal to the OMB from the Committee of Adjustments based on his opposition to the CZ. Mr. Vaughan or his office received communication from Superintendent White on December 24, 2008 questioning the resolve of the City to close the Comfort Zone and forwarding correspondence and an updated investigative summary on CZ from Constable Tajti.

• Mr. Vaughan’s chief of staff Ms. Kinnear wrote to Deputy City Manager Richard Butts, copied to Chief Planner & Executive Director, City Planning Gary Wright; Acting MLS Manager Jim Hart; Medical Officer of Health David McKeown; and Manager, Toronto Public Health, Jim Chan on December 31, 2008 describing a plan by the Superintendent White supported by Mr. Vaughan to close the CZ by invoking the public nuisance provisions of the City of Toronto Act. Ms. Kinnear forwarded under separate cover the December 24, 2008 correspondence from Superintendent White and correspondence from Constable Tajti.

• Ms. Kinnear’s December 31, 2008 email noted that MLS had failed to attend a meeting arranged by 14 Division officers and wrote “Councillor Vaughan is looking for your assurance that this matter is being given priority by all City Divisions.” Ms. Kinnear’s December 31, 2008 email further requested a letter from the City that CZ was a “known problem property” by Friday, January 2, 2009. In response to Ms. Kinnear’s December 31, 2008 email, Mr. Butts (via his assistant) forwarded Ms. Kinnear’s December 31, 2008 email to MLS Director of Investigation Services Lance Cumberbatch, asking Mr. Cumberbatch to “please investigate/take any appropriate action”. In response to Ms. Kinnear’s December 31, 2008 email, Mr. Hart (via his assistant) sent an email to Manager Licensing Services, Richard Mucha attaching the communications from Superintendent White and requesting a summary of the Tribunal Report to be reviewed with the Deputy City Manager’s office.

• On December 31, 2008, Ms. Kinnear requested a letter from Toronto District School Board trustee Chris Bolton opposing the Silver Dollar’s appeal to the Ontario Municipal Board from the Committee of Adjustments based on Mr. Vaughan’s opposition to the CZ. Mr. Bolton complied on January 1, 2009.

• Mr. Vaughan’s office received follow-up message from Superintendent White by phone on February 11, 2009 re “Concerns about Comfort Zone”. Ms Kinnear followed-up with Acting MLS Manager Mr. Hart respecting the status of MLS actions respecting CZ on February 19, 2009.

[87] There was some detailed evidence about the manner in which the TPS executed the search warrant, but no evidence that the City or Mr. Vaughan had any knowledge, awareness, or responsibility for the execution of the search warrant. As I have already noted, the Defendants cannot be held liable for the actions of the TPS.

[88] The Plaintiff relies on the December 24, 2008, email that Superintendent White sent to Mr. Vaughan’s office, forwarding an email from PC Tajti. In this email, Superintendent White was inquiring whether Mr. Vaughan’s office could be of assistance in facilitating communication between some of the City divisions, after it was brought to her attention that a City agency had failed to attend the December 21, 2008 walk through. The email also enclosed a copy of PC Tajti’s report.

[89] I find that there is no evidence that Mr. Vaughan or his office inquired or received any sensitive or confidential information from the TPS following the execution of the search warrant. Superintendent White testified that she had no recollection of speaking with Mr. Vaughan or members of his office following the execution of the search warrant. She also testified that it was proper for a councillor to contact her. Superintendent White testified that it was possible that she may have spoken with Mr. Vaughan following the execution of the search, but she was certain that she would not have disclosed any information beyond what was contained in the TPS news release on March 17, 2008. Mr. Vaughan and Sgt Zammit testified they had no dealings with one another about The CZ.

[90] Superintendent White did admit that “shutting down” The CZ was not terminology that best captured her intent. She testified that the CZ was an issue of serious concern to 14 Division, as the walk-throughs were discovering drugs and the TPS continued to receive service calls to the area. Superintendent White testified that closing The CZ was never a priority of 14 Division. Both she and Sgt. Zammit testified that any expression by PC Tajti was his opinion alone. As I have noted above, the Defendants are not liable for the actions of the TPS and the TPS is not a party to this action.

[91] Four days after the execution of the search warrant, on March 20, 2008, Mr. Vaughan wrote an email to the Harbord Village Residents Association (“HVRA”) and other constituents titled “Good News and Bad News from the Corner of Spadina and College.” Mr. Vaughan testified that the impact of The CZ on the surrounding neighbourhood was pronounced and that he had a duty to take a positon and report to his constituents concerning a significant event in the community.

[92] I agree that the source of some of the information in Mr. Vaughan’s email, came from the news, limited discussion with Superintendent Ruth White, or the TPS press release and that some of the information may have been inaccurate or embellished.

[93] With respect to the Plaintiff’s allegations regarding Mr. Vaughn’s conversation with Mr. Wynn, several factors support the Wynn version of the conversation with Mr. Vaughan respecting CZ. The purpose of the meeting was most likely to discuss the Dupont development. The contact report maintained by Mr. Vaughan’s office for Wynn Family Properties Inc. refers only to the Dupont development. The prospect of development of the Spadina property was remote as the Wynns had been unable to secure a lot on College Street, which they considered to be a prerequisite so that any development could face south, away from the Scott Mission. This characterization of the conversation is denied by Mr. Vaughn.

[94] Mr. Vaughan did tell Mr. Wynn that kids had died of overdoses at CZ.

[95] Mr. Wynn and Mr. Vaughan testified that Mr. Vaughan suggested that the Wynn family should sever their relationship with the CZ. The dispute in the evidence is with respect to the context in which the discussion took place. Specifically, whether Mr. Vaughan indicated he would oppose Mr. Wynn’s Dupont project unless the CZ’s tenancy was terminated. I do find that neither witness had a clear recollection of the timing or the content of the conversation. CZ alleges that this meeting happened between March 16, 2008 and March 20, 2008. Mr. Wynn’s evidence was that the conversation took place in the spring of 2008 and he could not recall when.

[96] Mr. Vaughan testified he first became aware that the Wynn family owned the Waverly Hotel when they mentioned it. Mr. Vaughan’s email to his constituents mentioned that the Wynn’s had received unsolicited offers to purchase the CZ property. It is submitted that Mr. Vaughan could only have received that information from Mr. Wynn.

[97] There were, however, no consequences of the conversation as the CZ’s tenancy continued, as well as the relationship between Mr. Wynn and Mr. Vaughan. There were subsequent meetings regarding the proposed Dupont project. Although there was limited evidence that the management of the Plaintiff felt a loss of some bargaining power with their landlord, there is no evidence that The CZ had any issues in continuing their relationship with their landlord for a further 9 years. The CZ ultimately left the Spadina location when the building was demolished.

[98] I do not accept that there was anything improper about the May 12, 2008, telephone conversation between Mr. Kendall and Mr. Vaughan, to support a finding of some form of wrongdoing or malice by Mr. Vaughan. Mr. Vaughan testified that the telephone call took place based on his understanding that it was regarding The Silver Dollar and its patio application. As a politician, he was cautious about speaking with anyone who may be involved in ongoing criminal proceedings. He was aware criminal charges had been laid following the execution of the search warrant at the CZ. He testified that he would only meet in the presence of the police to ensure propriety. The conversation ended with Mr. Kendall indicating that such a meeting would be pursued and set up.

[99] On December 25, 2008, Ms. Kinnear forwarded Superintendent White’s email to Mr. Vaughan and outlined the various steps she would undertake while he was on holiday. It was her responsibility to schedule and coordinate meetings on the different issues in the Ward. Ms. Kinnear could not remember whether she had any contact with Mr. Vaughan during this time aside from this email. With respect to step #3 listed in the email, Ms. Kinnear testified that Mr. Vaughan had previously consulted with the City’s solicitor, Ms. Kinastowski, on how the new public nuisance provisions of the City of Toronto Act applied to nightclubs generally, as there were several high risk problems in the ward. Mr. Vaughan wanted to understand the legislation and canvass his role to best assist the community. Mr. Vaughan was informed by Ms. Kinastowski that the provision was not applicable to The CZ, and he did not pursue this further. I do not find this conduct to be improper.

[100] Further, Ms. Kinnear’s December 31, 2008 email to Mr. Butts was consistent with her email to Mr. Vaughan on December 25, 2008 that she would take steps to follow up. In doing so, Ms. Kinnear asked various City agencies to coordinate to address issues concerning The CZ. Ms. Kinnear also asked that the City provide a letter acknowledging the property as a known “problem property” before the OMB. The City did not provide such a letter.

[101] On December 31, 2008, Ms. Kinnear wrote to Mr. David McKeown to ensure that Toronto Public Health (“TPH”), was aware of the full scope of information with respect to The CZ. Ultimately, Mr. Empringham of TPH did report the status of the TPH activity related to The CZ, including his recent DineSafe pass notice issued two weeks earlier.

[102] Ms. Kinnear also followed up with Mr. Hart on February 19, 2009, when she received no response in relation to her December emails. She has no recollection on what occurred next, or receiving any further response.

[103] Mr. Vaughan also testified that consistent with his experience in working in the Entertainment District, if police execute a search warrant and lay criminal charges, it is common for City agencies to follow up with an investigation in respect of any by-law violations. This is part of their normal duties.

[104] I accept Mr. Vaughan’s evidence that he, as a City Councillor acted in good faith to represent his constituents. As part of that mandate to represent his constituents, he had the obligation to take positions and advocate for the greatest good of his constituents. Mr. Vaughn testified that his high volume office (hundreds of emails per week) was structured according to delegated roles, whereby each staffer would communicate with constituents directly.

[105] There is no evidence that Mr. Vaughan directed or influenced the TPS investigations into The CZ and their enforcement actions. Mr. Vaughan testified that there is a firewall between the TPS and City Councillors with respect to their individual responsibilities and powers. Mr. Vaughan also testified that as a Councillor he did not and could not direct or instruct any City staff. He and his staff did however, act as a liaison with City departments on behalf of his constituents.

[106] Mr. Vaughan testified that he had heard concerns and complaints associated with The CZ. His overall goal was not the closure of The CZ, but rather, the restoration of balance and peace in the community and to ensure that The CZ (as all other businesses) operated within the applicable rules, policies and regulations. Mr. Vaughan also testified that he had no power to direct the closure of The CZ. I find that Mr. Vaughn engaged in advocacy for his constituents and accordingly acted in good faith while performing his duties as a member of City Council and a representative of his constituents.

Complaint to the Integrity Commissioner

[107] In August of 2013, Mr. David Yarmus (for The CZ) made a complaint against Adam Vaughan to the Integrity Commissioner.

[108] On October 18, 2013, the Integrity Commissioner released a Decision rejecting the complaint and concluded that:

“The complaint under this provision is based on votes and motions taken by Councillor in his capacity as an elected official. There is no allegation that these positions have been taken to serve any private advantage for the Councillor or for any one relationship to him. … Although councillors may take positions that are unpopular with those affected, this is a political decision to be made in the exercise of the duties of a councillor.”

[109] I find that the actions of Mr. Vaughn and his office were performed in furtherance of his duties as a City Councillor. The emails sent from his office, were sent to share information and to request City agencies to perform their respective functions. In the emails, there was no suggestion of direction or guidance on how to perform any function. I find that there is nothing inappropriate about the emails from Mr. Vaughn’s office upon which the Plaintiff relies. The evidence of the lack of response by the various City agencies supports a finding that there was no concerted effort on the part of the Defendants to conspire against the Plaintiffs.

[110] Further, I find that the evidence does not support a finding of any agreement or concerted action between Mr. Vaughan, his office and the City. There was evidence of the lack of coordination and delayed responses between the City and Mr. Vaughan’s office. I also find that there is no evidence of any unlawful conduct by any City agency or members of Mr. Vaughan’s office. As I have noted above, I find that the Plaintiff has not proven its allegations and theories of conspiracy.

[111] I do not find on the basis of the evidence, that there was a conspiracy to injure the Plaintiff between the Defendants and the TPS.

Allegations against the City of Toronto

• In advance of a March 31, 2008 meeting with Toronto Police Service (“TPS”) 14 Division, Martin Smith of Municipal Licensing and Standards (MLS) sent correspondence regarding the public nuisance provisions of the City of Toronto Act to close CZ.

• MLS accepted requests by TPS to participate in joint inspections of CZ during business hours on April 6, 2008, June 29, 2008, October 26, 2008 and December 21, 2008. The April 6, 2008 joint inspection involved approximately 20 TPS officers. The June 29, 2008 joint inspection involved five TPS officers. The October 26, 2008 joint inspection involved approximately 15 TPS officers. MLS missed the joint inspection scheduled by TPS for December 21, 2008.

• MLS initiated three prosecutions against the CZ for operating an entertainment establishment/nightclub without a licence, all of which were resolved in CZ’s favour:

(i) Ticket TA 329984 issued by Anthony Bartolo on April 6, 2008 without identifying the number of patrons or the available seating;

(ii) Summons 71248 issued by Anthony Bartolo on June 29, 2008, again without identifying the number of patrons or the available seating;

(iii) Summons 44456 issued by David Moskowitz on August 14, 2011, identifying sufficient seating for more than 50% of patrons, and withdrawn April 2, 2012;

• With respect to the April 6, 2008 licensing charge against CZ, MLS was seeking a closure order against CZ. MLS initiated a further prosecution against CZ on November 3, 2013 for operating a public hall without a licence (summons 4860 999 14 100524), which went to trial March 24, 2015 and resulted in an acquittal. An appeal launched April 22, 2015 was abandoned October 10, 2015. Richard Mucha of MLS placed a notation in its licence inquiry system on March 17, 2008, the day after the execution of the search warrant, to prevent the automatic annual renewal of CZ’s restaurant licence.

• MLS accepted payment of the annual renewal fee for CZ’s restaurant licence July 13, 2008 and allowed the license to expire August 22, 2008. MLS issued its refusal to renew of CZ’s restaurant license August 28, 2008. CZ appealed the refusal to renew its licence to the Licensing Tribunal on September 26, 2008. CZ’s Licensing Tribunal hearing could not proceed until MLS provided its report to the Licencing Tribunal. MLS delayed for almost five years to prepare its April 5, 2013 report to the Licensing Tribunal respecting CZ’s appeal. MLS waited a further three years after preparing its April 5, 2013 report respecting CZ’s appeal without submitting the report to the Licensing Tribunal. MLS wrote to The CZ on May 9, 2016, to inquire if The CZ was still seeking the renewal of its licence and inquiring about persons who either never worked at the CZ or last worked there eight years earlier. CZ responded that it was still seeking the renewal of its licence.

• MLS did not submit its report to the Licencing Tribunal respecting CZ’s appeal by December 17, 2017, the last date that CZ was at the Spadina location. A Licencing Tribunal hearing was never held. It should be noted that CZ was permitted to operate pending the hearing of the appeal.

Licensing issue allegations

• On August 14, 2011, MLS Officers Moskowitz and Tamaki attended the Comfort Zone, accompanied by TPS officers.

• Officer Moskowitz noted that: (a) he paid a $20 cover charge to enter The Comfort Zone; (b) No food sales were observed; (c) The dance floor had approximately 150 persons, and the DJ booth was occupied with three people playing music; (d) There were approximately 100 seats available for patrons; (e) The outside rear patio had approximately 50 persons.

• On September 9, 2011, summons 44456 concerning the offence of carrying on the business, trade or occupation of an owner of an entertainment establishment/night club without having the necessary licence so to do, contrary to the Municipal Code, was issued against 1631651 Ontario Inc., arising from the inspection on August 14, 2011.

• On or about December 5, 2011, David Dolson, counsel for the CZ authored a letter advising that the Plaintiff had never been given a hearing for its appeal of the refusal to renew its Eating Establishment licence.

• On April 2, 2012, Amanda Ross, a solicitor in the City’s Prosecutions Section, emailed The Comfort Zone’s counsel to advise that Summons #44456 would be withdrawn that day.

• On August 15, 2012, Andrea Sloan, a supervisor at the Toronto Licensing Tribunal, emailed Mr. Dolson, responding to his fax of August 9, 2012, advising that the Tribunal had not received a report and the Tribunal could not schedule a hearing.

• On October 23, 2012, Rick Gobio from MLS, Licensing Enforcement Unit, sent an email addressed to Police Constable Tajti.

• On April 5, 2013, Ian Redfearn, a supervisor at MLS, drafted a report addressed to the Toronto Licensing Tribunal regarding CZ’s application for renewal of an eating establishment licence.

• On November 3, 2013, the Comfort Zone was charged with ticket no. 100524 for the offence of “Did Carry on the business, trade, or occupation of a keeper of a public hall without having the necessary licence to do so”.

• On March 24, 2015, following a hearing, Justice of the Peace Madigan dismissed the charge laid under ticket no. 4860 999 14 100524.

• On April 22, 2015, the City filed a notice of appeal of Justice of the Peace Madigan’s March 24, 2015 decision.

• On October 20, 2015, the City abandoned its appeal of charge 4860 999 14 100524 of keeping a public hall without having the necessary licence.

• In summary, of the total of 22 charges laid against the CZ by City agencies, 16 were withdrawn, one was resolved in favour of the CZ and five resulted in convictions and fines. The charges and their dispositions are as follows:

Date	Summons number	Charge	Disposition and date
Apr-6-2008	TB066457	Failure to post an identification sign (Smoke- Free Ontario Act)	Withdrawn
Apr-6-2008	TB066189	Failure of proprietor to give notice that smoking is prohibited (Smoke-Free Ontario Act)	Withdrawn
Apr-6-2008	TB066456	Failure to post age restriction and health warning signs (Smoke-Free Ontario Act)	Withdrawn
Apr-6-2008	TB066455	Display of cigarettes other than in individual packages (Smoke-Free Ontario Act)	Withdrawn
Apr-6-2008	TB066454	Promote sale of tobacco products where tobacco sold or offered for sale (Smoke-Free Ontario Act)	Withdrawn
Apr-6-2008	TB066190	Failure of proprietor to post no smoking signs where smoking prohibited (Smoke-Free Ontario Act)	Withdrawn
Apr-6-2008	TB066458	Maintain hazardous foods at an internal temperature between 4°C and 60°C (Health Protection and Promotion Act)	Convicted and fined $615 on September 27, 2011
Apr-6-2008	TB066459	Fail to provide soap or detergent in food preparation area (Health Protection and Promotion Act)	Convicted and fined $615 on September 27, 2011
Apr-6-2008	TB066462	Operate food premises maintained in a manner adversely affecting sanitary condition (Health Protection and Promotion Act)	Withdrawn
Apr-6-2008	TB066460	Fail to provide thermometer in storage compartment (Health Protection and Promotion Act)	Withdrawn
Apr-6-2008	TB066461	Operator fail to ensure floor of food handling room kept clean (Health Protection and Promotion Act)	Withdrawn
Apr-6-2008	TA32998 4	Entertainment establishment/nightclub owner operate no licence (City of Toronto Municipal Code)	Withdrawn
Apr-6-2008	83739310	Fail to post licence (City of Toronto Municipal Code)	Withdrawn
Jun-29-2008	71248	Carrying on the business, trade or occupation of an owner of an entertainment establishment/night club without having the necessary licence so to do (City of Toronto Municipal Code)	Withdrawn on September 27, 2011
Jan-11-2009	TB065417	Fail to protect food from contamination or adulteration (Health Protection and Promotion Act)	Convicted and fined $615 on September 27, 2011
Jan-11-2009	TB065418	Fail to provide thermometer in storage compartment (Health Protection and Promotion Act)	Withdrawn
Jan-11-2009	TB065419	Fail to remove garbage when necessary to maintain sanitary condition (Health Protection and Promotion Act)	Withdrawn
Jan-11-2009	Tb065420	Operate food premises maintained in manner adversely affecting sanitary condition (Health Protection and Promotion Act)	Withdrawn
Jan-11-2009	TB066469	Promote sale of tobacco products in place where sold or offered for sale (Smoke-Free Ontario Act)	Convicted and fined $615 on September 27, 2011
Jan-11-2009	TB066498	Failure of proprietor to give notice that smoking prohibited (Smoke-Free Ontario Act)	Convicted and fined $615 on September 27, 2011
Jan-11-2009	TB066499	Failure to post no smoking signs where smoking is prohibited (Smoke-Free Ontario Act)	Withdrawn
August-14-2011	44456	Carrying on the business, trade or occupation of an owner of an entertainment establishment/night club without having the necessary licence (City of Toronto Municipal Code)	Withdrawn on April 2, 2012
November 3, 2013	100524	Did carry on the business, trade, or occupation of a keeper of a public hall without having the necessary licence (City of Toronto Municipal Code)	Dismissed on March 24, 2015, appeal abandoned October 20, 2015

Silver Dollar Patio Variance

• On May 3, 2000, the Committee of Adjustment (“COA”) issued a Notice of Decision to The Silver Dollar granting a bylaw variance in respect of its rear patio.

• On May 3, 2000, the COA sent a Corrected Notice of Decision to the owner of the building 693793 Ontario Limited, advising that the patio bylaw variance would expire as of May 2, 2003.

• On May 11, 2006, an Order to Comply was issued to the owner of the building, 693793 Ontario Limited, for a contravention of the Building Code because the rear patio structure remained in place.

• On September 15, 2006, Elsa Norberto submitted an Application for a Permit to Construct or Demolish on behalf of 1508758 Ontario Inc., the Silver Dollar Room.

• On April 19, 2007, Sander Gladstone Architect, who had been retained by the management of the Silver Dollar, wrote to the City of Toronto Building Department submitting the required building permit application requested by the City.

• On April 19, 2007, Elsa Norberto wrote a letter to the City Building Department assigning Sander Gladstone Architect as agent for all matters relating to zoning and building permit.

• On April 20, 2007, Sander Gladstone submitted an Application for a Permit to Construct or Demolish on behalf of 1508758 Ontario Inc., the Silver Dollar Room, to install a licensed (AGCO) patio for 41 persons.

• On May 17, 2007, Wade Tam, City Manager, sent a letter to 693793 Ontario Limited, indicating that the building permit application revealed that certain requirements of the Ontario Building Code and/or other applicable By-laws have not been satisfied. Attached to the letter was an Applicable Law Notice, Zoning bylaw Notice, and an Ontario Building Code Notice.

• On January 21, 2008, Mr. Gladstone wrote to the COA seeking to avoid having the COA process to approve a variance. In the letter, Mr. Gladstone states that The Silver Dollar “did create a problem by installing a tubular metal frame and tent canopy over a portion of the patio without a permit”.

• On April 30, 2008, Mr. Gladstone submitted an application to the COA seeking a minor variance in respect of the Silver Dollar patio.

• On June 27, 2008, Mr. Gladstone was served with a notice of a public hearing for July 9, 2008, on the Silver Dollar’s April 30, 2008 application for a minor bylaw variance.

• On July 4, 2008, Mr. Gladstone emailed Barbara Carou, of the City of Toronto’s planning department in respect of the Silver Dollar’s variance application. Ms. Carou replied that Planning has no objections to application and would not be submitting a letter to the COA for consideration.

• Ms. Carou informed Mr. Gladstone that she was not aware of any public objections and told him to follow up with Adam Vaughan’s office if he had any concerns.

• On July 4, 2008, Mr. Gladstone emailed Adam Vaughan to advise him of the application and provided his contact information if Mr. Vaughan should have any comments or concerns.

• On July 6, 2008, Rory Sinclair, the chair of the Harbord Village Residents’ Association, sent an email to Angela Kinnear and Jennifer Chan of Adam Vaughan’s office.

• On July 7, 2008, the residents of Robert Street sent a letter, enclosing a community impact statement dated June 20, 2008, to the COA asking that the application be dismissed. The letter was signed by 28 residents of Robert Street.

• On July 8, 2008, Robert Lee, City Traffic Planning, sent a Memorandum to Anita MacLeod, COA, regarding the patio. The Memorandum stated that the zoning bylaw requires a minimum of six parking spaces, but the application does not provide for any parking spaces. Mr. Lee stated that he does not have any objections to the proposed parking supply variance subject to various conditions.

• On July 8, 2008, Adam Vaughan sent a letter to the Chair and Members of Toronto and East York Panel B at the COA in respect of the Silver Dollar’s April 30, 2008 application for a minor bylaw variance.

• On July 8, 2008, Rory Sinclair of HVRA sent a letter to Grant Munday of the COA opposing the approval of the Silver Dollar’s application.

• On July 9, 2008, Mr. Gladstone sent a letter to the COA seeking approval of the Silver Dollar’s application.

• On July 9, 2008, the COA issued the notice of decision refusing the Silver Dollar’s application for a minor variance.

• After the COA released its Decision, also on July 9, 2008, The Silver Dollar and The Comfort Zone entered into an agreement, which states that “on occasion, the patrons of CZ are permitted restricted access to SD for purposes of purchasing and consuming alcoholic beverages solely in SD and use of the SD patio for smoking”.

• On July 10, 2008, Rory Sinclair of the HVRA, sent an email to “neighbours of lower Robert Street”, titled “Massive Victory at Committee of Adjustment yesterday”. Mr. Sinclair forwarded this email to Adam Vaughan.

• On July 22, 2008, the Silver Dollar appealed the decision of the COA to the Ontario Municipal Board (“OMB”).

• On September 15, 2008, the OMB scheduled the hearing of the Silver Dollar’s appeal for December 15, 2008.

• On September 24, 2008, Adam Vaughan provided a notice of motion to City Council requesting that the City Solicitor appear at the OMB in support of City’s refusal of the Silver Dollar’s minor variance application.

• On September 24 to 25, 2008, City Council adopted the motion proposed by Adam Vaughan.

• On December 8, 2008, Mr. Gladstone sent an email to Elsa Yarmus, et. al, seeking letters of support from neighbours, including the Scott Mission. Mr. Gladstone also suggested staging photographs of the patio for use at the OMB.

• On December 15, 2008, the OMB held the first day of its hearing into the Silver Dollar’s appeal of the refusal of its variance application.

• On December 30, 2008, Ralph Berrin swore a Statutory Declaration, which was provided to the OMB.

• On December 31, 2008, Angela Kinnear sent an email to Richard Butts requesting a letter from the City acknowledging that the Comfort Zone is a known “problem property” in the upcoming OMB hearing in respect of the Silver Dollar’s rear patio. The City did not provide such a letter.

• On January 1, 2009, Chris Bolton, TDSB School Trustee for Ward 10, which includes Lord Lansdowne Public School, sent a letter to the OMB in opposition to the Silver Dollar’s appeal.

• On January 5, 2009, David Smith from The Scott Mission sent a letter to the OMB in opposition to the Silver Dollar’s appeal.

• On January 27, 2009, the OMB issued an interim order with respect to, inter alia, the patio variance at the Silver Dollar.

• The OMB’s decision of January 27, 2009 granted the requested variance subject to certain conditions being met. On the second day of the two-day hearing, the Silver Dollar changed its proposal, and as a condition for the variances, it volunteered to eliminate direct access from the Comfort Zone to the patio 24/7.

• On March 6, 2009, the OMB delivered its decision on costs. In dismissing the Silver Dollar’s Motion for Costs, the OMB held “The Board finds nothing in the City’s conduct, in response to that original application which went to the hearing, that could be characterized as being unreasonable, frivolous, vexatious, or in bad faith”.

• The Silver Dollar did not bring an application for judicial review of the OMB decision.

Occupant load issue

• On March 19, 2008, TFS returned to conduct an inspection at the CZ.

• On March 28, 2008, a Notice of Violation from TFS was served on the CZ that its occupant load was 232 people.

• The CZ’s Architect submitted drawings to the City on November 27, 2008 to increase the occupant load.

• On December 5, 2008, Mr. Berrin revised and resubmitted an application for the continuance of a restaurant occupancy allowing a maximum of 308 persons, and advising that the structural amendments requested in the September 12, 2008 notice had been satisfied and the required documentation provided.

• On December 16, 2009, Mr. Bader sent an email which advised theCZthat “[the facility] is still deemed to be an entertainment facility”.

• The CZ was never successful in having its occupant load increased from 232.

Asset Forfeiture

• On February 20, 2013, Superintendent Mario DiTommaso wrote a letter to Jeffrey Wynn, The Comfort Zone’s landlord and building owner.

• On April 4, 2013, Detective Maisonneuve sent Dianne Wood an email.

• On April 18, 2013, Dave Yarmus wrote a letter to Chief William Blair.

• On July 19, 2013, Becky Singfield of the Asset Forfeiture Unit of the TPS submitted a police brief to the civil forfeiture advisor of the Crown Law Office- Criminal, providing them with information for the purpose of assessing whether action should be taken against the landlord of 484 Spadina, as a result of occurrences at the CZ. As I have referred to above, there is no evidence to support the conspiracy claim between the Defendants and the TPS. The Plaintiffs have therefore not established their claim with respect to these actions of the TPS.

The Law

[112] The Municipal Act, 2001 during the operative time provided for immunity as follows:

Immunity

448 (1) No proceeding for damages or otherwise shall be commenced against a member of council or an officer, employee or agent of a municipality or a person acting under the instructions of the officer, employee or agent for any act done in good faith in the performance or intended performance of a duty or authority under this Act or a by-law passed under it or for any alleged neglect or default in the performance in good faith of the duty or authority.

Liability for torts

(2) Subsection (1) does not relieve a municipality of liability to which it would otherwise be subject in respect of a tort committed by a member of council or an officer, employee or agent of the municipality or a person acting under the instructions of the officer, employee or agent.

[113] Similarly, the City of Toronto Act, 2006 during the operative time provided for:

Immunity re performance of duty

391 (1) No proceeding for damages or otherwise shall be commenced against a member of city council, an officer, employee or agent of the City or a person acting under the instructions of the officer, employee or agent for any act done in good faith in the performance or intended performance of a duty or authority under this Act or a by-law passed under it or for any alleged neglect or default in the performance in good faith of the duty or authority.

Liability for torts

(2) Subsection (1) does not relieve the City of liability to which it would otherwise be subject in respect of a tort committed by a member of city council, an officer, employee or agent of the City or a person acting under the instructions of such an officer, employee or agent.

[114] The Plaintiff submits that if misfeasance of public office has been proven, statutory immunities for acts done in good faith would are negated on the basis that duties have been exercised for an improper purpose. The tort of misfeasance of public office is specifically designed to “provide a measure of accountability for public officials who do not exercise their duties of office in good faith.”

[115] When I consider and review the totality of the evidence, I find that Mr. Vaughan acted as a City Councillor legitimately representing his constituents. He was entitled to and expected to take positions and advocate a point of view. While his high volume office was structured according to delegated roles, whereby each staffer would communicate with constituents directly, Mr. Vaughan was ultimately responsible for the operation of his office. His office would routinely receive hundreds of emails a week. I can not find any malice or bad faith by Mr. Vaughn.

[116] In the case of The Fit Effect v. Brant County Board of Health, 2021 ONSC 3651, this court stated as follows with respect to what constitutes bad faith by a public officer:

As noted in the recent case of Pedigree Poultry Ltd. v. Saskatchewan Broiler Hatching Egg Producers Marketing Board, 2020 SKQB 100 at para. 231, what constitutes bad faith by a public officer was canvassed by the Supreme Court of Canada in Entreprises Sibeca Inc. v. Frelighsburg (Municipality), 2004 SCC 61, [2004] 3 SCR 304, at para 26, where Deschamps J. found as follows:

[T]he concept of bad faith can encompass not only acts committed deliberately with intent to harm, which corresponds to the classical concept of bad faith, but also acts that are so markedly inconsistent with the relevant legislative context that a court cannot reasonably conclude that they were performed in good faith.

[117] The evidence does not support any finding of bad faith as alleged.

Defamation

[118] The Plaintiff relies on:

(i) Mr. Vaughan’s statements to Mr. Paul and Mr. Jeff Wynn regarding kids having died from drug overdoses at CZ;

(ii) Mr. Vaughan’s March 20, 2008 Good News/Bad News email;

(iii) Mr. Vaughan’s July 8, 2008 letter to Committee of Adjustments respecting SD patio variance application.

[119] The CZ submits it was defamed by Mr. Vaughan. The focus of the Plaintiff is on Mr. Vaughan’s “Good News and Bad News” email dated March 20, 2008, Mr. Vaughan’s letter to the Committee of Adjustment, dated July 8, 2008, and on the alleged defamatory comments to the Plaintiff’s landlord, Mr. Paul Wynn, during a meeting.

[120] Following its release of the Decision Volpe v. Wong-Tam, 2022 ONSC 3106, I asked the parties to make submissions on the applicability, if any, to the matters at issue in the present action.

[121] The Decision supports the view that the elected officials are not acting outside of their duties, nor are they acting in bad faith, when they take strong positions on matters in furtherance of their service to constituents.

[122] The City and Mr. Vaughan submit that the Plaintiff has failed to prove its defamation claim as against Mr. Vaughan. They rely on the defence of qualified privilege and the statutory immunity provided in section 391 of the City of Toronto Act, 2006 (“COTA”), both of which are discussed in the Volpe decision.

[123] In that decision, the principles of qualified privilege are set out by citing the Supreme Court’s decision in Hill for the proposition that “[q]ualified privilege applies to defamatory statements where ‘the person who makes a communication has an interest or a duty, legal, social or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it’”.

[124] The court summarizes the following principles from the jurisprudence regarding qualifies privilege:

(a) Qualified privilege protects (i) statements of public officials on matters of public interest, … and (ii) communications between community members and city officials on matters of public interest” [citations omitted];

(b) “Qualified privilege is assessed on an objective basis. It may protect a communication which is not based upon true facts—the defence attaches to the circumstances in which the communication is made, rather than the communication itself”;

(c) “Public officials ‘have a duty to keep each other, the government and the public informed on matters related to the public interest. [They] have an obligation to keep each other informed on matters falling within their competence’”;

(d) “A councillor’s freedom of expression is ‘a crucial instrument for achieving effective participation in and transparent management of municipal affairs’”; and,

(e) “Communications from constituents to city representatives are protected where the constituent has a ‘personal, social and civic interest’ in providing information to the city, and the city has a corresponding ‘civil and civic interest’ in receiving it.”

[125] Further, the court refers to “[t]he importance of preserving a municipal councillor’s freedom of expression that was discussed by the Supreme Court in Prud’homme c Prud’homme” [citation omitted]. The court stated:

“In a defamation action against an elected municipal official, freedom of expression takes on singular importance, because of the intimate connection between the role of that official and the preservation of municipal democracy. Elected municipal officials are, in a way, conduits for the voices of their constituents: they convey their grievances to municipal government and they also inform them about the state of that government … Their right to speak cannot be limited without negative impact on the vitality of municipal democracy… [Emphasis added in Volpe]”

[126] The Defendants submit the defence of qualified privilege is applicable to the allegations of defamation against Mr. Vaughan. City Councillors should not be deterred from expressing their opinions and from being critical of behaviour. I agree that it is the role of a municipal Councillor to take public positions on issues that affect their constituents. They must be allowed the freedom of speech necessary to properly state, persuade, explain, and justify their positions to the public.

[127] Pursuant to the COTA, Mr. Vaughan, as a City Councillor, was mandated “to represent the public and to consider the well-being and interests of the City”.

[128] At trial, Mr. Vaughan testified that the impact of The CZ on the surrounding neighbourhood was significant. As a result of his duty as a City Councillor to keep his constituents informed, Mr. Vaughan was entitled to take a positon and report to his constituents on a significant event in the community. I find that his written email communication to constituents falls within the scope of statements protected by qualified privilege.

[129] As well, Mr. Vaughan exercised his duties as a City Councillor when he wrote a letter to the Committee of Adjustment on July 8, 2008, wherein he voiced his concerns regarding the application by The Silver Dollar for a patio variance.

[130] The CZ’s argument is that even if the defence of qualified privilege is applicable, the communications were made in bad faith and/or with malice. I have not accepted this submission. I have found that there was no evidence of malice or bad faith on behalf of Mr. Vaughan.

[131] In Volpe, the court stated that “[p]roving malice is ‘not a burden that is easily satisfied’, and is an inference that courts should be slow to draw” [citations omitted].

[132] In Volpe, the court also held that:

“[t]he mere fact that a defendant dislikes a plaintiff, or ‘was indignant at what he believed to be the plaintiff's conduct and welcomed the opportunity of exposing it’, does not establish malice [citation omitted]. Nor is it sufficient that a defendant knows their defamatory publication will injure the plaintiff; the defendant’s desire to injure the plaintiff must have been the dominant motive for the publication” [citation omitted].

[133] I have found that at all material times, Mr. Vaughan acted in good faith while performing his duties as a member of City Council and a representative of his constituents. The CZ has not proven that the “dominant motive” behind any of Mr. Vaughan’s actions was malicious. I have accepted that the evidence establishes Mr. Vaughan’s legitimate concerns about activity at The CZ, its impact on the community, and a desire that appropriate steps be taken to address the concerns.

[134] I find that the provision of section 391 of the COTA apply, “No proceeding for damages or otherwise shall be commenced against a member of City Council”, among others, “for any act done in good faith in the performance or intended performance of a duty.”

[135] In Volpe, the court states that:

“Councillors and trustees must be able to take positions on issues of importance to their constituents, without facing the risk of a claim for misfeasance in public office when a person disagrees with that position. Such an approach is consistent with the comments of the court in The Catalyst Capital Group, in which the court adopted its earlier comment in Pikangikum First Nation v. Nault” [citations omitted]:

“The tort of misfeasance of public office is difficult to establish. The plaintiff must prove more than mere negligence, mismanagement or poor judgment. To succeed, the plaintiff must demonstrate that the defendant knowingly acted illegally and in bad faith chose a course of action specifically to injure the plaintiff. [Emphasis added in Volpe]”

[136] The CZ further alleges that the defendants deliberately engaged in conduct with the intention of causing damage to the economic interests of the plaintiff, used unlawful means to interfere with the plaintiff’s economic interests, and caused loss and damage to the plaintiff’s economic interests. It is therefore submitted that the Defendants can not rely on the above noted immunity defences as they are not available because their actions were taken for the improper purpose of harming the CZ, which is an element of each tort claimed other than defamation. In the case of defamation, the improper purpose will negate immunity and other defences. I donot accept this submission.

[137] In 1515545 Ontario Ltd v Niagara Falls (City), 78 OR (3d) 783, 2006 CanLII 264, our Court of Appeal for Ontario dismissed an appeal finding that the evidence relied upon with respect to misfeasance in public office was based on bald allegations. The court found that there was no evidence that the City had control or power to direct or authorize the actions of Niagara Regional police, or that there existed any conspiracy between the two entities. In particular, the plaintiffs alleged that uniformed police officers visited the establishment over 30 times in over 6 months and significantly interrupted their operations, including demanding everyone’s identification. The Court held that “the mere fact that the City was aware of conduct by other public officers does not constitute any evidence of unlawful conduct on the part of the City.” The Court also found that the plaintiffs had failed to prove their claim that their establishment was being targeted in exclusion of others, when no evidence existed that other businesses were similarly committing unlawful acts.

[138] I find that the Court of Appeal’s reasoning is applicable in this case.

[139] Further, with respect to the coordination between the regional police service and the City, the Court of Appeal held that:

“As to the first, one would expect the police authorities to co-operate with the civil authority in closing illegal operations. This allegation is no evidence of an unlawful act. As to the mayor's statement, it must be read in context. This was part of a letter to an interested party in which the mayor stressed that the City was committed to following lawful process. I see no evidence of an attempt by the City to act in excess of powers granted to it or that it exercised its powers for an improper purpose. To the contrary, the evidence in support of these bald allegations shows the City acting for proper purposes and no attempt to act in excess of its powers.” [emphasis added]

[140] As well, on the basis of the evidence presented in this trial, I find that the Plaintiff has not established a link between the actions of the Defendants and the presence of police. There is no evidence that the alleged police presence was at the direction of the City and/or Mr. Vaughan. Further, there is no evidence that the TPS took direction from any of the Defendants.

[141] As I have already noted above, I find that the Plaintiff has not met the burden of proving the conspiracy and tortious actions of the Defendants or that the Defendants acted in bad faith, outside the scope of their duties.

Interference with economic relations

[142] In the Volpe case, the court discussed the applicable law with respect to the tort of unlawful interference with economic relations, stating the elements to establish a claim were:

(a) The defendant intended to injure the plaintiff’s economic interests;

(b) The interferences must have been by illegal or unlawful means; and

(c) The plaintiff suffered economic harm or loss as a result.

[143] The court held that “the scope of the tort is ‘narrow’ and is only available where a defendant commits an unlawful act against a third party, and that act intentionally causes harm to the plaintiff” [Emphasis added].

[144] In this Action, there were no unlawful acts by the Defendants against the CZ.

[145] In its claim for interference with economic relations, the Plaintiff relies on:

• the threats to the landlord, whether to oppose the Dupont development or any future development of Spadina site for the purpose of harming or closing CZ meets the criteria of the tort of intimidation.

• opposing the SD patio variance for the purpose of harming CZ meets the criteria of misfeasance of public office in relation to the SD.

[146] The damages claimed are:

• vulnerability in its relationship with its landlord such that CZ requested but could not press for reimbursement from the landlord for repairs it carried out to comply with the Electrical Safety Authority order that only serviced the Waverly Hotel or were shared among all tenants.

• inability to use the patio that it shared with the Silver Dollar such that CZ patrons were relegated to standing in a parking lot to smoke rather than in a sheltered outdoor seating area, contributing to the overall economic loss claim

[147] The Plaintiff alleges that the Defendants deliberately engaged in conduct with the intention of causing damage to the economic interests of the plaintiff, used unlawful means to interfere with the plaintiff’s economic interests, and caused loss and damage to the plaintiff’s economic interests.

[148] This intention to cause economic harm must be an end in itself or a necessary means of achieving an end that serves some ulterior motive. The tort is not satisfied if the economic loss was merely a foreseeable consequence of the defendant’s actions, or if the defendant was merely negligent, or reckless as to the consequences of the negligent conduct.

[149] Intentionally interfering with a plaintiff’s economic interests is not actionable if the means used are lawful. In the case of O'Dwyer v Ontario Racing Commission, 2008 ONCA 446, the former employee of the racetrack brought an action against the Ontario Racing Commission for placing a call to the racetrack’s general manager and relaying a number of unproven allegations of misconduct against the plaintiff, resulting in loss of opportunity to be re-hired. The Court of Appeal for Ontario held that it was not satisfied that the phone call constituted an “intentional illegal act” warranting a finding of interference with economic relations.

[150] Further, The CZ has the burden of establishing that the Defendants’ unlawful conduct was the proximate cause of its economic losses.

[151] In 1515545 Ontario Ltd v Niagara Falls (City), 78 OR (3d) 783, 2006 CanLII 264 (ONCA), the Court of Appeal for Ontario agreed that where a City has properly and lawfully enacted a by-law, “the fact that the defendants or any other person might suffer economic loss because of compliance or enforcement does not give rise to a cause of action against the City.

[152] In the event that I may be wrong on some of my findings noted above, I discuss the damages claimed, which are:

(a) Specific expenses incurred in relation to items damaged, needing repairs following the execution of the warrant on March 16, 2008 and repairs that were the responsibility of its landlord that CZ was unable to recover:

(b) Cancellation/inability to obtain insurance and ultimately higher premiums

(c) Placed in a vulnerable position with respect to its landlord

(d) Reductions in attendance

(e) Discounts and promotions required to boost attendance to mitigate losses

(f) Inability to access directly the patio previously shared with Silver Dollar

(g) Frustrated building permit application seeking to restore occupant load

(h) Losses incurred due to reduction in revenue

[153] The Defendants emphasize that there is no evidence from any customer of The CZ that the execution of the search warrant, subsequent inspections, and alleged police presence had any impact on their choice to attend the CZ.

[154] If there were any damages from the execution of the search warrant, the TPSB, which is not a party to this action, is vicariously liable for the actions of its officers pursuant to section 50 of the Police Services Act. An action was commenced by the Plaintiff on February 15, 2015, against the TPSB, former Chief William Blair, and Superintendent Mario DiTommaso, but was dismissed.

[155] The test for determining causation is the “but for” test. The plaintiff bears the burden of showing, on a balance of probabilities, that “but for” the defendant’s impugned acts, the damage would not have occurred.

[156] In Clements v Clements, 2012 SCC 32 at para 8, the Supreme Court of Canada confirmed that only in limited circumstances, the law has recognized an exception to the “but for” test and has instead applied a “material contribution” test.

[157] The Plaintiff does not challenge the validity of the charges laid against the CZ by TPH on April 6, 2008 and January 11, 2009. The CZ was convicted and paid fines with respect to three food safety violations, and the remainder were ultimately withdrawn during a global resolution.

[158] I agree that there is no evidence that customers of CZ refused to attend the CZ because of the presence of police, or any of the bylaw charges placed by the City. Mr. Rando testified that no customer approached to inquire as to the status of the municipal licensing before entering the venue. Mr. Rando also testified that had it been economically feasible, paid duty officers would have been something he would be interested in, and he thought it was a good idea and provided benefits. Further, there was evidence that the TPS had reasons to be patrolling the area, because of other businesses.

[159] The evidence is that the laying of any of the above noted charges by the MLS inspectors or TPS did not prevent the CZ from continuing to carry on business, or harm business operations. Further, I accept the submissions made by the Defendants that the expert evidence on damages based on assumptions made regarding the growth of various markets referred are not based on any persuasive evidence.

[160] For all of the above noted reasons, as the Plaintiff has not met its burden of proof on establishing its claims, this Action is dismissed.

Costs

[161] As the Defendants are the successful parties on this motion, they are entitled to costs. If the parties are unable to agree on costs, the Defendants may make submissions of no more than two pages, double spaced sent the Plaintiff, uploaded to Caselines with a copy sent to my assistant Roxanne Johnson at Roxanne.johnson@ontario.ca by 12 p.m. on August 2, 2022 . The Plaintiff may make submissions of no more than two pages, double spaced sent to the Defendant, uploaded to caselines with a copy sent to my assistant by 12 p.m. on August 16, 2022. No reply submissions will be accepted.

Pollak J.

Released: July 21, 2022