



COURT OF APPEAL FOR ONTARIO

CITATION:

2211266 Ontario Inc. (Gentlemen's Club) v. Brantford
    (City), 2013 ONCA 300
DATE: 20130508
DOCKET: C56299

Doherty, Cronk and Lauwers JJ.A.

BETWEEN

2211266 Ontario Inc. O/A Gentlemens Club

Applicant (Appellant)

and

The Corporation of the City of Brantford

Respondent (Respondent in appeal)

Myron W. Shulgan, for the appellant

Kimberly A. Farrington, for the respondent

Heard: April 29, 2013

On appeal from the judgment of Justice D. Chappel of the
    Superior Court of Justice, dated October 16, 2012.

By the Court:

I.        Introduction

[1]

This appeal concerns a municipalitys powers under the
Municipal
    Act, 2001
, S.O. 2001, c. 25 (the Act) to impose licensing requirements
    on the owners and operators of adult entertainment parlours and those persons
    who perform live performances of an adult nature within those facilities.

[2]

The appellant, 2211266 Ontario Inc., operates a facility in the City of
    Brantford under the name of the Gentlemens Club. In February 2012, it
    applied to the Superior Court of Justice for orders declaring invalid various
    parts of the Citys adult live entertainment licensing by-law, enacted under
    the Act as Chapter 329 of the Citys Municipal Code (the By-law).

[3]

As relevant to this appeal, the appellant attacked the validity of ss.
    329.4.1 and 329.4.2 of the By-law, which require the owners and operators of
    adult live entertainment parlours to be licensed, and ss. 329.4.7 and 329.4.9
    of the By-law, which require entertainers who perform live performances of a
    specified nature in such facilities to be licensed (collectively, the
    Licensing Provisions).  The appellant argued that the Licensing Provisions
    exceed the Citys statutory licensing and by-law making authority.

[4]

The Licensing Provisions read as follows:

329.4.1        Licence
     required

No person shall operate, engage in or carry on the occupation
    or business of an adult live entertainment parlour unless he or she first
    obtains a licence under this Chapter to do so.

329.4.2        Operator
     licence  required

In the event that an owner does not personally operate the
    adult live entertainment parlour, the owner shall not permit any person other
    than an operator licensed under this Chapter to operate the adult live
    entertainment parlour.

....

329.4.7        Entertainer
     not to perform in unlicensed facility

No

entertainer

shall

perform

in

an adult live entertainment parlour which
    has not been licensed under the provisions of this Chapter.

...

329.4.9        Entertainer
     licence  required

No person shall perform as an entertainer unless he or she
    obtains a licence under this Chapter to do so.

[5]

The application judge dismissed the appellants application concerning
    the Licensing Provisions on two bases. She held: (1) that the Licensing Provisions
    are a valid exercise of the Citys authority under the Act to implement a licensing
    system in connection with matters relating to health, safety and the well-being
    of persons in the municipality; and (2) in any event, the Licensing Provisions
    fall within the Citys statutory authority under the Act to license businesses.

[6]

Accordingly, by judgment dated October 16, 2012, the application judge
    dismissed the appellants application regarding the validity of the Licensing Provisions.

[7]

The appellant appeals. For the reasons that follow, we conclude that the
    appeal must be dismissed.

II.       General Licensing
    Authority of Municipalities

[8]

Section 8(3)(c) of the Act grants municipalities the power to create a
    system of licenses respecting any matter over which a municipality has by-law
    making authority under ss. 10 and 11 of the Act. Section 8(1) of the Act
    directs an expansive interpretation of the scope of this power, so as to
    confer broad authority on the municipality to enable the municipality to govern
    its affairs as it considers appropriate and to enhance the municipalitys
    ability to respond to municipal issues.

[9]

Section 10(2) of the Act specifies those matters in respect of which a
    municipality like the City may pass by-laws.  These include, among other
    matters: (1) the health, safety and well-being of persons (s. 10(2).6); (2)
    protection of persons and property, including consumer protection (s. 10(2).8);
    and (3) business licensing (s. 10(2).11).

[10]

In
    addition, s. 151(5) of the Act provides:

Subsections

(1)

to

(4)
    [concerning business licensing systems] apply with necessary modifications
to
    a system of licences with respect to any activity, matter or thing
for
    which a by-law may be passed under sections 9, 10 and 11
as if it were a
    system of licences with respect to a business
. [Emphasis added.]

[11]

Thus,
    municipalities enjoy a broad licensing authority under the Act.  Contrary to
    the appellants submission in its factum, this authority is not confined to
    licensing businesses, trades and occupations. Sections 8(3) and 10(2) of the
    Act contain no such restriction. Instead, the power to pass by-laws respecting
    business licensing is but one of the matters identified in s. 10(2) as a
    legitimate subject matter for the discretionary exercise of a municipalitys
    by-law making authority.  Moreover, by the combined operation of ss. 10(2) and
    151(5) of the Act, by-laws may be passed creating a system of licenses with
    respect to any activity, matter or thing under s. 10(2) as if it were a
    system of licences with respect to a business.

[12]

In
    this case, the application judge held that the By-law is a valid exercise of
    the respondent municipalitys jurisdiction under ss. 8(3) and 10(2)(6) of the
    Act to implement a system of licensing in connection with matters relating to
    health, safety and the well-being of persons in the municipality.

[13]

We
    agree.  As noted by the application judge, both the preamble and the content of
    the By-law reveal that it is aimed at the promotion of these legitimate
    municipal purposes.  In addition, in our view, the authority to pass the By-law
    could also be anchored in the objectives of s. 10(2).8 of the Act  protection
    of persons and property, including consumer protection  and s. 10(2).11 
    business licensing.

[14]

On
    this ground alone, the appellants attack on the validity of the Licensing Provisions
    fails.  As the By-law reflects the valid exercise by the City of its licensing
    authority under ss. 8(3) and 10(2) of the Act, it follows that the Licensing
    Provisions, which form part of the overall licensing system established by the
    By-law, are similarly valid.

III.      Specific Business Licensing Authority of
    Municipalities

[15]

In
    addition to the general authority of municipalities under s. 8(3) of the Act to
    pass by-laws pertaining to any matter delineated in s. 10(2) of the Act, s.
    151(1) of the Act furnishes municipalities with express statutory authority to provide
    for a system of licences with respect to a business.  The word business is
    defined expansively under s. 150 of the Act, and includes: (a) trades and
    occupations; (b) exhibitions, concerts, festivals and other organized public
    amusements held for profit or otherwise, among other things.

IV.     Licensing Provisions

[16]

In
    this case, the application judge held that, apart from its by-law making
    authority under ss. 8(3) and 10(2) of the Act, the City is also empowered to
    license adult live entertainment parlours and entertainers under the business
    licensing provisions of the Act.  We agree.

[17]

Section
    154 of the Act contemplates that, without limiting a municipalitys by-law
    making authority under ss. 9, 10 and 11 of the Act, a local municipality may
    implement a licensing system concerning adult entertainment establishments
    under the authority of s. 151 of the Act.  Under s. 154(2)(a), the term adult
    entertainment establishment is defined as including any premises or any part
    of them ... if, in the pursuance of a business,  (a) goods, entertainment or
    services that are designed to appeal to erotic or sexual appetites or
    inclinations are provided in the premises or part of the premises.

[18]

The
    appellant accepts that the City had the authority to pass the By-law under its
    s. 151 business licensing authority.  However, the appellant argues in its
    factum, in effect, that the By-law is invalid because, in respect of adult live
    entertainment parlours, it fails to define a class of business, calling, trade
    or occupation by reference to a commercial activity or work, instead imposing a
    licensing requirement on any premises within which individuals engage
in
    any activity
, a principal feature or characteristic of which is nudity or
    partial nudity (emphasis added).  This, the appellant contends, is tantamount
    to impermissibly imposing a licensing requirement based on a dress code.

[19]

In
    our view, this argument fails.  As the application judge observed, the current
    Act does not require that a municipal licensing system apply to a specific
    type, category or class of business, trade or occupation.

[20]

Under
    s. 8(4) of the Act, a municipal by-law passed under s. 10(2) may be general or
    specific in its application and may differentiate in any way and on any basis a
    municipality considers appropriate.  In contrast, under s. 10(2) of the
    predecessor version of the Act, a municipality was empowered to differentiate
    in its by-laws concerning different persons or businesses only if the persons
    or businesses constitute different classes of persons or businesses defined in
    the by-law:
Municipal Act, 2001
, S.O. 2001, c. 25, am. to 2004. 
    Section 10(2) of the former statute was replaced in 2007 by s. 8(4) of the
    current Act.  For this reason, as the application judge noted, the appellant`s
    reliance on this courts decision in
679619 Ontario Limited v. Windsor
    (City)
(2006), 210 O.A.C. 37 is misplaced  that case concerned the former
    version of the Act.

[21]

As
    a result, as the application judge observed, the relevant question under the
    current Act regarding a municipalitys business licensing authority is whether
    the licensing system in question applies to a business in general or in a
    general sense to trades and occupations.

[22]

In
    the case of the Citys By-law, there can be no doubt that this requirement is
    met.  The By-laws operator licensing requirements under ss. 329.4.1 and
    329.4.2 apply only to those who operate premises for a commercial purpose.  For
    example:

(1)

the
    operator Licensing Provisions (ss. 329.4.1 and 329.4.2 of the By-law) apply
    only to the occupation or business of an adult live entertainment parlour;
    and

(2)

the phrase adult
    live entertainment parlour is defined under s. 329.1.1 of the By-law as any
    premises in which or in part of which,
in pursuance of a trade, calling,
    business or occupation
, a live performance of an adult nature is provided
    [Emphasis added.]

[23]

This
    focus on commercial activity is consistent with the Citys statutory business
    licensing authority.  Section 154(2)(a) of the Act defines the term adult
    entertainment establishment as premises in which specified activities are
    undertaken in pursuance of a business.  Further, as the application judge
    noted, the definition of business under s. 150 of the Act is focused on
    various types of commercial activities, methods by which those activities are
    pursued, and entities or enterprises that pursue them.

[24]

Thus,
    as the application judge indicated, in order to trigger the operator licensing
    requirements of the By-law, the activity in question must therefore constitute
    part of a commercial activity occurring at the enterprise.

[25]

The
    appellant contends, however, that the definition of the phrase live
    performance of an adult nature under the By-law, which forms part of the
    definition of an adult live entertainment parlour, casts an overly broad and
    vague net, so as to capture any persons who engage in a live performance,
    exhibition or activity while nude or partially nude, even if no commercial
    purpose attaches to the performance, exhibition or activity.  We disagree.

[26]

The
    relevant definitions under the By-law read as follows:

329.1.1 
          Adult live entertainment parlour  defined

adult live entertainment parlour means any premises in which
    or in part of which,
in pursuance of a trade, calling, business or
    occupation
, a live performance of an adult nature is provided.

329.1.2 
          Live performance of an adult nature  defined

live performance of an adult nature means any performance;
    exhibition or activity designed to appeal to erotic or sexual appetites or
    inclinations.  For purposes of this definition: performance, exhibition, or
    activity designed to appeal to erotic or sexual appetites or inclinations
    means a live performance, exhibition, or activity of which a principal feature
    or characteristic is the nudity or partial nudity of any person.

....

329.1.6        Entertainer
     defined

entertainer means a person who performs a live performance of
    an adult nature within an adult entertainment parlour.  [Emphasis added.]

[27]

The
    application judge adopted the appropriate interpretive approach to these
    provisions.  She held that the By-law definitions of adult live entertainment
    parlour, entertainer and live performance of an adult nature are linked
    and must be considered together in order to properly interpret and understand
    the scope of the licensing requirements.

[28]

Having
    considered the relationship between these defined terms and their significance
    under the Licensing Provisions, the application judge rejected the appellants
    claim that the Licensing Provisions are overly broad or vague.  She stated, at
    para. 32:

The question that must be determined is whether they apply in
    more general terms to individuals engaged in business,

trades

or

occupations

within

adult
    entertainment parlours.  I conclude that they do.  The definition of
    entertainer in by-law 329.1.6 specifically refers to a person who performs a
    live performance of an adult nature 
within an adult entertainment parlour

    (emphasis added).  This definition is therefore directly linked with the
    definition of adult live entertainment parlour in by-law 329.1.1, which as
    noted above includes as a key element that the live performance of an adult
    nature be provided
in pursuance of a trade, calling or occupation
. 
    When these two definitions are read together, the logical conclusion which
    emerges is that the term entertainer does not extend to
anyone
who
    performs a live performance of an adult nature at an adult live entertainment
    parlour, but only to those individuals who do so in pursuance of a trade,
    calling, business or occupation.  [Emphasis in original.]

[29]

We
    agree with this interpretive conclusion, substantially for the quoted reasons
    of the application judge.

[30]

It
    follows that, contrary to the appellants submission, persons who perform or
    participate in a performance at a facility while nude or partially nude other
    than in the course of a commercial activity related to adult live entertainment
    are not entertainers for the purpose of the Licensing Provisions.  Although
    advanced by it in its factum, the City appeared to resile from this position
    during oral argument.  In our view, this change in position was misconceived. 
    We agree with the Citys original submission that the provisions of the By-law
    distinguish between entertainers who perform live performances of an adult
    nature in an adult live entertainment parlour for a commercial purpose, and
    those who do not.  Only entertainers in the former category are subject to the
    Licensing Provisions of the By-law.

V.      Conclusion and Disposition

[31]

In summary, we agree with the application judge that the Licensing Provisions
    were validly passed by the City in the exercise of its general licensing and
    by-law making powers under the Act (ss. 8(3) and (10).  We also agree that the
    Citys specific statutory business licensing power (ss. 150-154 of the Act),
    afforded further authority for the Citys passage of the Licensing Provisions
    and that this authority was validly exercised in the circumstances.

[32]

Accordingly,
    the appeal is dismissed.  The respondent is entitled to its costs of the appeal
    fixed, as agreed by counsel, in the total amount of $5,000, inclusive of
    disbursements and all applicable taxes.

Released:

MAY -8 2013                                    Doherty
    J.A.

DD                                                  E.A.
    Cronk J.A.

P.
    Lauwers J.A.


