



COURT OF APPEAL FOR ONTARIO

CITATION: 232169 Ontario Inc. (Farouz Sheesha Café) v.
    Toronto (City), 2017 ONCA 484

DATE: 20170613

DOCKET: C62904

Weiler, van Rensburg and Huscroft JJ.A.

BETWEEN

232169 Ontario Inc. O/A Farouz Sheesha Café, 7923406
    Canada Inc., Club Layal El Sharke Inc., Oum Kulthoum, and Nile Palace Cafe

Applicants (Appellants)

and

The City of Toronto

Respondent (Respondent in Appeal)

Ryan P. Zigler, for the appellants

Kirsten Franz and Leslie Mendelson, for the respondents

Heard: June 6, 2017

On appeal from the judgment of Justice R. F. Goldstein of
    the Superior Court of Justice, dated October 7, 2016.

REASONS FOR DECISION

A.

Overview

[1]

The appellants operate hookah lounges in Toronto. Hookah lounges offer
    beverages and food for sale, but are known primarily as places to socialize or
    relax, and smoke hookahs, a form of water pipe. Hookah lounges charge for the
    use of hookahs and sell shisha, a legal substance that is smoked.

[2]

In 2015, the City of Toronto passed By-Law 1331-2015. The by-law
    prohibits the use of hookah devices in connection with premises, vehicles, or
    things required to be licensed by the City for various purposes.  In
    particular, the by-law prohibits the inhaling or exhaling of smoke from a
    hookah, as well as the holding of an activated hookah.

[3]

The appellants brought an application challenging the validity of the
    by-law. The application judge found as follows:

·

the
    purpose of the by-law is to deal with public health and safety, and that this
    purpose was specifically authorized by the
City of Toronto Act, 2006
,
    S.O. 2006, c. 11;

·

a
    broad and purposive approach should be taken to municipal powers;

·

although
    the City concedes that some hookah lounge operators may go out of business as a
    result of the by-law, the by-law does not have a confiscatory effect;

·

the
    City has the authority to prohibit a business in any event;

·

the
    by-law does not conflict with or frustrate the operation of the
Occupational
    Health and Safety Act
, R.S.O. 1990, c. O.1 (
OHSA
); and

·

the
    City did not act in bad faith.

[4]

The application judge held that the City had the authority to pass the
    by-law and that the by-law was valid.

[5]

The appellants appeal from the judgment dismissing their application.
    The City agreed to suspend the operation of the by-law pending the outcome of
    this appeal.

[6]

For the reasons that follow, the appeal is dismissed.

B.

Issues on appeal

[7]

The appellants raise three grounds on appeal.

[8]

First, they submit that the application judge erred in determining that
    the purpose of the by-law was the protection of health. They characterize the
    purpose of the by-law as the prohibition of hookah lounges, a purpose they say
    is beyond the Citys legislative competence.

[9]

Second, the appellants submit that regardless of the purpose of the
    by-law, it infringes on their property and civil rights to an extent not
    permitted by the
City of Toronto Act
or the common law.

[10]

Third, the appellants submit that the application judge erred in
    concluding that the by-law does not conflict with or frustrate the purpose of
    the
OHSA
.

[11]

We address each of these issues in turn.

(1)

The purpose of the by-law

[12]

The appellants submit that the purpose of the by-law must be determined
    having regard not only to its apparent purpose, but also its effect. They
    characterize health and safety concerns as the
motive
for the by-law,
    but submit that the effect of the by-law is the closure of many, if not most of
    the appellants businesses, and that this is determinative of the by-laws
    purpose.

[13]

The appellants do not submit that the Citys stated purpose  the protection
    of health and safety  is somehow colourable, but say that the primary effect
    of the law will be the closing of hookah lounges, and that this overwhelms the
    Citys health and safety motive when characterizing the purpose of the by-law.

[14]

This argument must be rejected.

[15]

As the application judge noted, the appellants are licensed by the City
    to sell food and may continue to do so. Indeed, they may continue to sell
    shisha. What they cannot do is to permit the smoking of hookah pipes on their
    business premises. There is no doubt that many hookah lounges will suffer
    economic harm as a result of the by-law and may no longer be economically
    viable, but it does not follow that this is the by-laws purpose. The
    protection of public health and safety necessarily has economic impact on the
    operation of the appellants businesses, but that impact is incidental to,
    rather than determinative of, the purpose of the by-law.

[16]

The application judge reviewed the background to the passage of the
    by-law, including the evidence of the Citys Medical Officer of Health, who
    reported to the City Council that hookah smoke was a health hazard to staff and
    patrons of establishments where it was smoked  regardless of what was smoked
    in the hookah. He noted that hookah smoking included some of the same
    carcinogenic chemicals associated with tobacco, and yet many wrongly assumed
    that hookah smoking was less harmful than smoking tobacco. The Medical Officer
    prepared a comprehensive report for the Board of Health that reviewed
    legislative responses from other jurisdictions in Canada and abroad, and
    recommended that hookah smoking in businesses licensed by the City be prohibited.

[17]

In short, there was ample support in the record for the application
    judges conclusion that the purpose of the by-law was the protection of public
    health and safety, a purpose specifically authorized by s. 8(2) of the
City
    of Toronto Act
.

[18]

That is sufficient to dispose of this ground of appeal. It is not
    necessary to determine whether the City has the broader power to prohibit the
    operation of a business.

(2)

Does the by-law infringe property and civil rights?

[19]

The appellants submit that the Citys by-law making power has to be given
    a limited reading in order to minimally impair their common law property
    rights. The appellants describe the legislation as in effect targeting and
    destroying their business property without compensation, a result that should
    be avoided in the absence of clear language in the
Act
or proof that
    the prohibition was necessary or essential to achieve the health and safety
    purpose.

[20]

We disagree.

[21]

The
City of Toronto Act
establishes broad by-law making
    authority. It is not to be given the narrow construction advocated by the
    appellants:
Toronto Livery Association v. Toronto (City)
, 2009 ONCA
    535, 253 O.A.C. 56, at paras. 29-30.

[22]

There is no basis to impugn the application judges finding that the
    by-law was not confiscatory in any event. This is not a case in which the City
    has taken something from the appellants, nor is the by-law tantamount to an
    expropriation. The by-law regulates business establishments otherwise licensed
    by the City. In no sense can the by-law be said to confiscate the appellants
    property.

(3)

Does the by-law conflict with or frustrate the
Occupational Health
    and Safety Act
?

[23]

There is no merit to the appellants submission that the
    by-law conflicts with or frustrates the purpose of the
OHSA
.

[24]

The by-law protects the health and safety of patrons as well as
    employees of businesses. It does not render compliance with the
OHSA
impossible, or even more difficult. On the contrary, the by-law is
    complementary to both the purpose and the provisions of the
OHSA
. Contrary
    to the appellants submission, the
OHSA
does not require the City to
    adopt measures short of a prohibition on hookah smoking in order to protect employment
    in hookah lounges.

C.

Conclusion

[25]

The application judge was alive to the hardship the passage of the
    by-law may occasion for the appellants. However, he recognized that it was not
    the courts role to second-guess policy decisions made by elected municipal
    officials. The
City of Toronto Act
specifically immunizes by-laws
    against judicial review for reasonableness: s. 213. The application judge was
    limited to determining the legal validity of the citys by-law, and he made no
    errors doing so.

[26]

The appeal is dismissed.

[27]

By agreement of the parties, each side will bear its own costs.

K.M. Weiler J.A.

K. van Rensburg
    J.A.

Grant Huscroft
    J.A.


