CITATION: 679619 Ontario Limited (Silvers Lounge) v.
DATE: 20070109
DOCKET: C44352
COURT OF APPEAL FOR ONTARIO
GILLESE, JURIANSZ and LAFORME JJ.A.
B E T W E E N : |
|
679619 ONTARIO LIMITED o/a Silvers Lounge, KATZMAN ENTERPRISES LTD. o/a Cheetah’s on the River, Leopards Broil & Lounge and Danny’s Tavern, 564163 ONTARIO LIMITED o/a Studio 4 Tavern, 1015111 ONTARIO LIMITED o/a Club T‑Zers and THE PRESIDENT’S CLUB LIMITED |
Myron W. Shulgan, Q.C. for the respondent |
- and - |
|
THE MUNICIPAL CORPORATION OF THE CITY OF
|
Patrick T. Brode for the appellant |
Heard: September 18, 2006 |
|
On appeal from the judgment of Justice Richard C. Gates of the Superior Court of Justice dated, September 30, 2005, with reasons reported at (2005), 14 M.P.L.R. (4th) 195.
GILLESE J.A.:
[1] Does the City of
BACKGROUND
[2] The City of
[3]
[4] The Licensing By-law fixes the annual licence fees for various occupations, including that of “dancer”. People who work as “dancers” must pay an annual licence fee of $466.00. The previous such licence fee was $246. Adult entertainment parlours pay a separate licence fee.
[5] Adult entertainment parlours are defined in s. 1.1(1) of the Licensing By-law as premises licensed under the Liquor Licence Act at which are offered “services appealing to or designed to appeal to erotic or sexual appetites or inclinations”.
[6] “Dancer” is defined in s. 1.1(1)(a) of the Licensing By‑law as:
[A]ny person other than a licensed owner or operator who provides services designed to appeal to erotic or sexual appetites or inclinations at an adult entertainment parlour.
[7] The services provided by a “dancer” are defined in s. 1.1(1)(g) of the Licensing By‑law:
“Services designed to appeal to erotic or sexual appetites or inclinations” includes,
(i) services of which a principal feature or characteristic is the nudity or partial nudity of any person. For the purposes of this clause “partial nudity” shall mean less than completely and opaquely covered:
· human genitals or human pubic region;
· human buttocks; or,
· female breast below a point immediately above the top of the areola.
(ii) services in respect of which the word “nude”, “naked”, “topless”, “bottomless”, “sexy” or any other word or any picture, symbol or representation having like meaning or implication is used in any advertisement.
[8] All persons working in any capacity in an adult entertainment parlour must pay the “dancer” licence fee if they perform their work while their genitals, pubic region or buttocks are not completely covered or are opaquely covered. If the person is a woman, the “dancer” licence fee must be paid also if her work is performed while her breasts are exposed.
[9]
[10] Mark Ferrari, the Windsor Manager of Gaming and Business Administration, testified that licence fees for each class of business, trade and occupation were established based on an evaluation of the time and expenditure spent on inspection, enforcement and administration divided by the number of licences. The licence fee of $466 for “dancers” is principally comprised of an administrative charge of $59.21; a cost of $298 for compliance checks by police patrol personnel for business licences; and, a cost of $59.87 for the cost of time devoted to licence enforcement divided by the number of licences.
[11] A group of operators of adult entertainment lounges located in
[12] By judgment dated September 30, 2005, Gates J. struck down the impugned parts of the Licensing By‑law. He held that the Licensing By-law impermissibly discriminated against employees in adult entertainment parlours. He also concluded that the amount of the licence fee was in excess of that permitted by section 150(10) of the Municipal Act, 2001, S.O. 2001, c. 25.
[13]
[14] For the reasons that follow, I would dismiss the appeal.
THE ISSUES
[15] The issues raised on this appeal are whether the application judge erred in declaring that:
1. those parts of the Licensing By-law purporting to charge a licence fee for “dancers” are null and void; and
2. the amount of the licence fee, as set by
THE VALIDITY OF THE LICENSING
BY-LAW
AS IT RELATES TO “DANCERS”
[16]
[17] Discriminatory provisions in a by-law are invalid unless enabling legislation authorizes such discrimination: see R. v. Sharma, [1993] 1 S.C.R. 650. As I explain below, in my view, those parts of the Licensing By-law which purport to govern “dancers” are discriminatory and such discrimination is not authorised by the Municipal Act, 2001.
[18] Section 150(1) of the Municipal Act, 2001, empowers
150. (1) Subject to the Theatres Act and the Retail Business Holidays Act, a local municipality may license, regulate and govern any business wholly or partly carried on within the municipality even if the business is being carried on from a location outside the municipality.
[19] Section 150(6)(a) states that businesses that may be licensed under s. 150(1) “include, (a) trades and occupations”.
[20] Pursuant to s. 150(8)(d),
(8) Without limiting subsection (1), the power to license, regulate and govern a business includes the power,
(d) to define classes of businesses and to separately license, regulate and govern each class;
[21] Sections 10(1) and (2) of the Municipal Act, 2001, empower
10.(1) Without limiting the generality of section 9 and except as otherwise provided, a by-law under this Act, except Parts VII to XIII, may be general or specific in its application and may differentiate in any way and on any basis a municipality considers appropriate.
(2) Despite subsection (1) and except as otherwise provided, a by-law under this Act may only deal differently with different persons or businesses if the persons or businesses constitute different classes of persons or businesses defined in the by-law.
[22] Sections 150(9) and (10), which are set out and considered in the following section, empower
[23] The combined effect of these provisions is that
[24] Black’s Law Dictionary, 6th ed., defines “trade” as follows:
Trade is not a technical word and is ordinarily used in three senses: (1) in that of exchanging goods or commodities by barter or by buying and selling for money; (2) in that of a business occupation generally; (3) in that of a mechanical employment, in contradistinction to the learned professions, agriculture, or the liberal arts.
An occupation or regular means of livelihood and is a business one practices or the work in which one engages regularly. One’s calling: occupation; gainful employment; means of livelihood. [Emphasis added, citations omitted.]
[25] “Occupation” is defined as:
That which principally takes up one’s time, thought, and or energies, especially, one’s regular business or employment; also, whatever one follows as the means of making a livelihood. [A] particular business, profession, trade, or calling which engages [an] individual’s time and efforts; employment in which one regularly engages or [a] vocation of his life.
[26] For ease of reference, the definitions of “dancer” and “services designed to appeal to erotic or sexual appetites or inclinations” are set out again:
a. “Dancer” means any person other than a licensed owner or operator who provides services designed to appeal to erotic or sexual appetites or inclinations at an adult entertainment parlour;
g. “Services designed to appeal to erotic or sexual appetites or inclinations” includes,
(i) services of which a principal feature or characteristic is the nudity or partial nudity of any person. For the purposes of this clause “partial nudity” shall mean less than completely and opaquely covered:
· human genitals or human pubic region;
· human buttocks; or,
· female breast below a point immediately above the top of the areola.
(ii) services in respect of which the word “nude”, “naked”, “topless”, “bottomless”, “sexy” or any other word or any picture, symbol or representation having like meaning or implication is used in any advertisement
[27] According to the definition of “dancer” in the Licensing By-law, a person need not perform any type of dance routine in order to be classified as a dancer. In fact, that definition coupled with the definition of “services designed to appeal to erotic or sexual appetites or inclinations”, makes it clear that a person can provide any type of service in an adult entertainment parlour and be classified as a dancer so long as, while performing the services, the person is nude or partially nude. Thus, the classification as “dancer” is not based on the work that the person regularly performs nor is it based on a person’s employment responsibilities. Rather, the classification is based on the amount of clothing that the person wears while performing any type of work within an adult entertainment parlour. Consequently, for example, under the Licensing By-law, a person who provides bartending services in an adult entertainment parlour, while wholly or partially nude, is a “dancer” and required to be licensed as such; whereas a fully‑clothed person performing the same bartending functions is not required to pay the “dancer” licence fee.
[28] I do not accept that classifying a person as a “dancer” by reference to the state of the person’s attire makes the service that the person renders a different trade or occupation. In my view, based on their dictionary definitions and in accordance with their ordinary meaning, the words “trade” and “occupation” are to be taken to refer to the regular employment services an individual is to perform, based on his or her skills and background, and not the manner in which the person is attired when he or she carries out their employment responsibilities. A bartender is a bartender, whether or not the person is fully‑clothed when pouring drinks. Similarly, a person waiting on tables is wait staff, regardless of whether they are fully‑clothed while serving their customers.
[29] In additional submissions,
[30] If “dancers” are not a separate trade or occupation, are they a different class as
[31] With respect, I do not interpret the Municipal Act, 2001, as empowering
[32] As a matter of logic, given my conclusion that there is no trade or occupation of “dancer” because, among other things, there are no common or roughly similar regular employment services which individuals must perform in order to be classified as a “dancer”, I cannot see how “dancers” can be a class within any given trade or occupation.
[33] While “class” is not defined in the Municipal Act, 2001, and there is nothing in the legislation that provides guidance on the relationship between trades and occupations and classes, it seems to me that a class would be some sub-group of employees within a particular trade or occupation who share membership in the sub-group based on working conditions or an employment-related characteristic. This can be illustrated by continuing with the example of bartenders. Bartenders may be hired to work on a full-time, part-time or seasonal basis. Classes of bartenders could be defined accordingly. In such a case, the classes would be defined by reference to working conditions.
[34] This view is consistent with the approach taken by the Federal Court of Appeal in Syndicat des journalistes de Radio-Canada (CSN) v. Canadian Broadcasting Corp. (2000), 23 C.C.P.B. 219. In that case, the federal Superintendent of Financial Institutions declared contract employees to be ineligible for entry into an employer-sponsored pension plan. Under the relevant legislation, employers were permitted to offer entry to the pension plan to those “classes” of employees which they selected. The employer had selected only “regular” employees, hired for indeterminate periods. As in the present case, the governing legislation did not define “class”. The Federal Court of Appeal affirmed the Superintendent’s decision. It reasoned that the word “class” referred to groupings of employees based on working conditions, such as the specified length of the employment contract or the method of pay.
[35] In conclusion, to require employees of adult entertainment parlours who perform their employment responsibilities while nude or partially nude to pay a different licence fee than that paid by fully-clothed employees who perform the same employment services is discriminatory. Such discrimination is not authorised by the Municipal Act, 2001, as it amounts to different treatment of persons within the same class of trade or occupation.
[36] For these reasons,
THE QUANTUM OF THE LICENCE FEE
[37] Given my conclusion that “dancer”, as that term is defined in the Licensing By-law, is not a separate trade or occupation nor a separate class of trade or occupation, Windsor cannot require employees of adult entertainment parlours to pay a licence fee on the basis that they are “dancers”. Having said that, in order to respond to the issues raised by the appellant, some comment is warranted on the quantum of the licence fee that
[38]
[39] The 1990 Act permits
[40] Section 7 of the 1990 Act stipulates that if its provisions conflict with those of another Act, other than the Municipal Act, 2001, the other Act is to prevail. It reads as follows:
7. If a by‑law passed under this Act conflicts with any other Act, other than the Municipal Act, for licensing, regulating or controlling any business or the person carrying on any business, that Act prevails to the extent of the conflict.
[41] The application judge held that
In my review of the two pieces of legislation, I am not satisfied that there is a conflict between them, but rather they may be both read together. While the City of Windsor Act permits the Municipality to fix annual fees for licenses, the Municipal Act provides guidance as to the quantum of the fees to be charged. I find that the restrictions set in the Municipal Act do apply to the City of
[42] I agree. While the 1990 Act gives
[43] Section 150(9) reads as follows:
(9) The total amount of fees to be charged for licensing a class of business shall not exceed the costs directly related to the administration and enforcement of the by-law or portion of the by-law of the municipality licensing that class of business.
[44] Section 150(10) sets out a list of costs that may be included as costs directly related to the administration and enforcement of the by-law. It reads as follows:
(10) Without limiting subsection (9), costs directly related to the administration and enforcement of the by-law may include costs related to,
(a) the preparation of the by-law;
(b) inspections related to the by-law;
(c) the enforcement of the by-law against a person operating a business without a licence;
(d) prosecution and court proceedings; and
(e) a reciprocal licensing arrangement under section 156.
[45] Thus, if Windsor were empowered to charge an annual licence fee for “dancers”, the total amount of the fees charged could not exceed the costs “directly related to the administration and enforcement of the by-law”, including those costs itemized in s. 150(10).
[46] The application judge considered
[A] review of the City’s evidence relating to the charges would in my view, lead to the inevitable conclusion that the actual charges are really the costs of maintaining a police presence in the downtown core area as opposed to administering its by-law.
[47] On the record, the application judge was entitled to make this finding. Consequently, I see no basis on which to interfere with the application judge’s determination that the fees charged were improper as they included costs beyond those authorised by ss. 150 (9) and (10) of the Municipal Act, 2001.
[48]
[49] With respect, this argument misses the point. It goes without saying that municipal officials are to act in good faith and with due diligence in the discharge of their obligations and the exercise of their powers. However, as previously explained, when establishing licence fees they must comply with the dictates of ss. 150(9) and (10) of the Municipal Act, 2001.
[50]
[51] In accordance with basic principles of fairness, parties are to be given an opportunity to make submissions on any matter on which the court relies in making its decision. The nature of the “facts” in question is beyond that which is so generally well-known and accepted that it cannot reasonably be questioned. Accordingly,
DISPOSITION
[52] Accordingly, I would dismiss the appeal with costs to the respondents fixed at $7,500.00, inclusive of disbursements and GST.
“E. E. Gillese J.A.”
“I agree H. S. LaForme J.A.”
JURIANSZ J.A. (Dissenting):
[53] I find myself in disagreement with the result reached by Gillese J.A. I agree with and adopt her review of the facts, the proceedings, the issues and the positions of the parties. This enables me to proceed directly to the areas where I take a different view and which would lead me to conclude that the City of Windsor had the power to license “dancers” as defined by the City’s By-law No. 395-2004 (“the Licensing By-law”) and that the licence fee was calculated in accordance with the Municipal Act, 2001, S.O. 2001, c. 25. I would allow the appeal.
1. The City of
Windsor had the authority to license “dancers”
[54] The first issue is whether the City had the authority to license “dancers” in the Licensing By-law. Gillese J.A. concludes that those parts of the Licensing By-law purporting to charge a licence fee for “dancers” are null and void. In her view, “dancers” do not constitute a different class of a trade or occupation. I take a different view.
[55] I conclude that the City can treat persons who work nude or partially nude in an adult entertainment parlour as composing a different class than those who work fully clothed. In the example discussed by Gillese J.A., I would regard the topless bartender working alongside the fully clothed bartender as performing a different job function. The topless bartender does all the work of the clothed bartender and in addition titillates the patron of the adult entertainment parlour. In the words of the Licensing By-law, in addition to doing the work of a clothed bartender, the topless bartender “provides services designed to appeal to erotic or sexual appetites or inclinations at an adult entertainment parlour.” The job function of appealing to erotic or sexual appetites can be performed in conjunction with any other job functions. The term “dancer” is simply the Licensing By-law’s label for the class of employees who perform this job function.
[56] Nude and partially nude workers constitute a class of employee not only because they provide an additional service, but also because they have different working conditions. They are subject to a “dress code”. Various aspects of an employer’s requirements or an employee’s preferences for manner of dress are the subjects of grievances in labour arbitration. I would regard the authority cited by the majority, Syndicat des journalists de Radio-Canada (CSN) v. Canadian Broadcasting Corp. (2000), 23 C.C.P.B. 219 (F.C.A.), as supporting rather than undermining the City’s treatment of nude or partially nude workers as a different class.
[57] In the present case, the Licensing By-law defines a class of employees who work in adult entertainment parlours. This class is characterized by the services it provides as well as by a working condition relating to dress.
[58] I would conclude that the City was entitled to treat employees who provide “services designed to appeal to erotic or sexual appetites or inclinations” as comprising a different class than those employees of adult entertainment parlours who do not provide such services. Further, the City could use the employees’ state of undress as the criterion to identify them as members of the class. As a result, I would conclude that the application judge erred by finding that the City did not have the power to enact the relevant parts of the Licensing By-law.
2. The licence fee was calculated in accordance with the Municipal Act, 2001
[59] The second issue is whether the amount of the licence fee was calculated in accordance with the requirements of s. 150(9) of the Municipal Act, 2001.
[60] The application judge took judicial notice of the fact that the presence of many American young people, who visit
[61] The respondent sought to undermine the amount of the licence fee on the basis that the dancers’ licence fee was not based on the precise direct costs incurred in administering and enforcing the portion of the By-law that applied to dancers. In particular, the City used gross calculations to average cost components across different categories of licences. The respondents’ argument centered on the costs of policing the Licensing By-law and I will discuss this issue in that context.
[62] Section 150(9) of the new Municipal Act, 2001 requires municipalities to charge no more than the “costs directly related to the administration and enforcement of the by-law or portion of the by-law of the municipality licensing that class of business.”
[63] In my view care should be taken not to place an unworkable auditing burden on municipalities. Some allocation of common costs among classes is unavoidable. There are common costs in preparing and publishing the By-law. No objection was, or could be taken, to allocating those costs among all classes. The Licensing By-law is a general one and the schedule sets out 38 different licences, each with its own fee.
[64] The respondents objected to the By-law treating policing costs as a common cost allocated across several classes. I regard treating at least some policing costs as common to be necessary. For example, even if police officers were required to divide the time they spent at a particular adult entertainment parlour between checking the parlour’s licence and the dancers’ licences, the time spent going to the address would be common to both classes of licence. If the police travelled to a neighbourhood where they checked licences at adult entertainment parlours, holistic centres, and other licensed establishments, the travelling time could be allocated among several classes. Therefore, in my view treating some police costs as common costs is unavoidable.
[65] As well, a question that arises about all common costs is whether they should be divided pro rata among licence classes or per capita among licence holders.
[66] It seems to me that any method of allocating costs could appear to some to have some element of arbitrariness. For this reason, I accept the City’s submission that s. 150(9) requires it to act in good faith to allocate the direct costs among licensed classes in a reasonably equitable manner. In doing so, it may consider some direct costs to be common to several classes and divide the aggregate amount of those costs among several classes.
[67] In this case the City divided the total policing costs incurred in enforcing the By-law evenly among all the licence classes which required police inspection and report. Certainly a more refined allocation of costs would be possible if one required more detailed time records from the police. I would not interfere with the City’s allocation of police costs as common across several classes of licence. Its determination of what direct costs are common costs deserves the broad deference accorded to the exercise of municipal powers generally. Allocation of costs on another basis might be equally vulnerable to criticism.
[68] The respondents, relying on two answers during the cross-examination of the City official who explained how licence fees were set, argued that costs other than direct costs were included in setting the licence fees. The respondents bore the burden of proving this was the case. The official’s comment that policing costs of “licensed and unlicensed” adult entertainment establishments were included is unclear because, in my view, the cost of enforcing the By-law against unlicensed premises is properly part of its enforcement costs. The official’s remark that the City did not license massage parlours is undermined by the context in which it was given and by the fact the City does licence holistic centres, the definition of which includes the giving of massages. In my view, the respondents required more than this isolated testimony to meet the burden of proving that costs other than direct costs were included in the licence fee.
[69] As the respondents did not establish that anything other than costs directly incurred in enforcing the By-law or a portion of the By-law were included, I would conclude the licence fee is valid.
3. Conclusion
[70] Therefore, I would find that the City does have the authority to charge a licence fee for “dancers,” and that the fee imposed by the Licensing By-law did satisfy the requirements of s. 150(9) of the Municipal Act, 2001. I would allow the appeal, set aside the declaration of the application judge, and replace it with an order dismissing the respondent’s application.
RELEASED: January 9, 2007 (“EEG”)
“R. G. Juriansz J.A.”
[1] City of
[2] The By‑law also provides for the licensing of various occupations including plumbers, holistic practitioners, hawkers, peddlers and operators of lodging houses.