Judicial Review of Business Licensing Decision

Administrative law – Decisions reviewed – Municipal boards – Appeals – Renewal of business licence – By-laws – Judicial review – Procedural requirements and fairness – Failure to provide reasons

Paradise Night Club v. Leamington (Municipality), [2022] O.J. No. 4787, 2022 ONSC 6118, Ontario Superior Court of Justice, November 1, 2022, Backhouse J.

The applicant sought judicial review of a decision by the Appeal Committee of the Municipality of Leamington upholding an earlier decision to deny him a business license to operate Paradise Night Club in Leamington, Ontario. The applicant asked the Court to quash the decision and issue him a business license.

In 2018, the applicant applied for a business license for the Paradise Night Club as an “Eating Establishment”. He was permitted to continue operations as he awaited the outcome of his application. In March 2021, the applicant was informed by the issuer of licenses, Ms. Orton, that his application had been denied, including for reason that operation of the Paradise Night Club was against public interest and he had failed to submit certain documentation. The applicant appealed the decision to the Appeal Committee and a virtual hearing was conducted. The Appeal Committee upheld the decision of the issuer. In its brief reasons, the Appeal Committee did not indicate the facts or evidence relied upon and made no reference to submissions made by the applicant at the appeal hearing.

On judicial review, the applicant argued that he did not receive a fair hearing before the Appeal Committee. In particular, the hearing was started before the applicant and his representative were present, the committee chair introduced counsel for the municipality, Mr. Pritiko, as “our solicitor”, Ms. Orton did not appear despite being the “respondent” according to the rules of the appeal committee, and the applicant was denied an opportunity to cross-examine the issuer or Mr. Pritiko. The applicant further alleged that Mr. Pritiko wore four hats as (a) counsel for the municipality, (b) the respondent, (c) a witness, and (d) counsel for the Appeal Committee.

Considering the appeal as a whole, the Court concluded that the applicant was denied procedural fairness. The requirements for a hearing set out in the by-laws were not met, including for reason that Mr. Pritiko gave evidence and opinion on documents on which he had no firsthand knowledge and declined to be cross-examined. While the Court disagreed with the applicant’s allegation that it was clear from the transcript that Mr. Pritiko had acted as the Appeal Committee’s solicitor, the fact that he was introduced as “our solicitor” raised a concern as to his role, as did referral to him by first name at the hearing.

The Court further concluded that the decision of the Appeal Committee was unreasonable. The Appeal Committee appeared to adopt the conclusions of Ms. Orton without articulating its rationale. Where only written reasons are given, with no oral reasons to supplement, they must be intelligible on their own.

The procedural issues and the lack of reasons by the Appeal Committee led the Court to conclude that the matter must be remitted back to another appeal committee for reconsideration.

This case was digested by Ellie Einarson, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter.  If you would like to discuss this case further, please contact Ellie Einarson at eeinarson@harpergrey.com.

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