Date: 20011026
Docket: CA 174511
NOVA SCOTIA COURT OF APPEAL
[Cite as: New Glasgow (Town) v. MacGillivray Law Office Inc., 2001 NSCA 155]
BETWEEN:
MACGILLIVRAY LAW OFFICE INCORPORATED,
a body corporate, MACGILLICUDDY’S RESTAURANT
INC., a body corporate, MACGILLIVRAY PROPERTIES
LIMITED, a body corporate and JAMIE FRANK
MACGILLIVRAY
Appellants
- and -
TOWN OF NEW GLASGOW
Respondent
_____________________________________________________________________
DECISION
_____________________________________________________________________
Counsel: Jamie MacGillivray for the Appellants
Leisa T. MacIntosh for the Respondent
Application Heard: October 18, 2001
Decision Delivered: October 26, 2001
BEFORE THE HONOURABLE JUSTICE ELIZABETH A. ROSCOE
IN CHAMBERS
ROSCOE, J.A.: (In Chambers)
[1] This is an application by the appellants for a stay of execution pursuant to Civil Procedure Rule 62.10 pending appeal, which is scheduled for hearing on February 11, 2002.
[2] By order of Justice Davison, dated October 10, 2001, made pursuant to s. 266 of the Municipal Government Act, S.N.S. 1998, c. 18, the appellants were ordered to remove a sign advertising the appellant MacGillivray’s law practice and MacGillicuddy’s restaurant because it violated the respondent Town’s land use by-law. Specifically, the Town alleged that the sign had been erected without a development permit, the size of the sign exceeded that permitted in the downtown core zone, and it was situated on property not occupied by the businesses advertised. The appellants had submitted to Justice Davison that the sign by-law violated their right to freedom of expression guaranteed by s. 2(b) of the Charter.
[3] The respondent, in response to the application for a stay, has agreed that pending disposition of the appeal, it will not require the appellants to remove the structure of the sign which is affixed to the ground, but only the removal of the sign faces which are attached to the structure by screws. In fact, the Town has offered to have its workers remove the sign faces, store them pending the appeal and, if the appellants succeed on the appeal, to reinstall them at no cost to the appellants. The respondent is content to deal with the removal of the structure, if necessary, after the disposition of the appeal.
[4] Ordinarily, to succeed on an application for a stay pending appeal, the appellant must meet either the primary or the secondary test set out in Fulton Insurance Agencies Ltd. v. Purdy (1990), 100 N.S.R. (2d) 341, that is, either that:
1. there is an arguable issue raised on the appeal;
2. if the stay is not granted and the appeal is successful, the appellant will have suffered irreparable harm that it is difficult to, or cannot be compensated for by a damage award; and,
3. that the appellant will suffer greater harm if the stay is not granted than the respondent would suffer if the stay is granted;
or, failing to meet the primary test, satisfy the court that exceptional circumstances make it fit and just that a stay be granted.
[5] The Fulton case, commonly used by this court on applications for stays in private civil law matters, adopted and confirmed the standard established by the House of Lords in American Cyanamid Co. v. Ethicon, [1975] A.C. 396. In RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, the Supreme Court of Canada agreed that the American Cyanamid test was also applicable in applications for stays of proceedings pending appeal in Charter cases and determined that the appellant must establish:
1. that the appellant raises a serious issue;
2. that unless the stay is granted the appellant will suffer irreparable harm; and,
3. that after considering the “special factor” of the public interest, the balance of convenience favours the appellant.
[6] Therefore, when Charter issues are raised on the appeal, the third prong of the test is enlarged to include a consideration of the public interest, and the secondary or exceptional circumstances part of the Fulton test is not included.
[7] The grounds of appeal are stated as:
1. The Learned Trial Judge improperly interpreted and applied section 9 and section 1 of the Charter.
2. The Learned Trial Judge based his decision, in part, on facts which were not in evidence.
3. Such other errors of law and fact that may appear.
[8] At the hearing of the application, the appellants acknowledged a typographical error in the first ground of appeal and indicated they would immediately file an amended notice of appeal which would substitute s. 2(b) for s.9 of the Charter.
[9] After the appellants agreed to file an amended notice of appeal, counsel for the respondent conceded that the appellants had met the first prong of the primary test as expressed in Fulton, that is, that they raised an arguable issue. Given that the appellants raise the interpretation of s. 2(b) of the Charter in the context of municipal regulation of commercial advertising, an issue not previously dealt with by this court, I would agree that the RJR-MacDonald requirement that there is a serious issue raised has been met.
[10] The appellant MacGillivray addresses the irreparable harm aspect in his affidavit by asserting that if the order is not stayed, there would be several months during which the law firm and restaurant would not be able to advertise and that time could never be made up and it would be impossible to calculate the value of the lost business. The appellant’s complaint that the removal and possible replacement of the sign would cause “substantial inconvenience and disruption” is answered by the Town’s offer to remove the sign faces pending appeal.
[11] During his oral argument, Mr. MacGillivray added that if his right of freedom of expression guaranteed by the Charter is infringed pending the appeal, he will have no remedy to recover damages for the breach from the Town, and therefore he will suffer irreparable harm. Although he offered no authority for this submission, it does appear to be supported by the following statement commencing at §60 of RJR-MacDonald:
60 The assessment of irreparable harm in interlocutory applications involving Charter rights is a task which will often be more difficult than a comparable assessment in a private law application. One reason for this is that the notion of irreparable harm is closely tied to the remedy of damages, but damages are not the primary remedy in Charter cases.
61 This Court has on several occasions accepted the principle that damages may be awarded for a breach of Charter rights: (see, for example, Mills v. The Queen, [1986] 1 S.C.R. 863, at pp. 883, 886, 943 and 971; Nelles v. Ontario, [1989] 2 S.C.R. 170, at p. 196). However, no body of jurisprudence has yet developed in respect of the principles which might govern the award of damages under s. 24(1) of the Charter. In light of the uncertain state of the law regarding the award of damages for a Charter breach, it will in most cases be impossible for a judge on an interlocutory application to determine whether adequate compensation could ever be obtained at trial. Therefore, until the law in this area has developed further, it is appropriate to assume that the financial damage which will be suffered by an applicant following a refusal of relief, even though capable of quantification, constitutes irreparable harm.
[12] Later in the decision, when summarizing their conclusions, at §79, they state:
. . . In Charter cases, even quantifiable financial loss relied upon by an applicant may be considered irreparable harm so long as it is unclear that such loss could be recovered at the time of a decision on the merits.
[13] As noted recently by Justice Stach in Ontario Federation of Anglers & Hunters v. Ontario (Ministry of Natural Resources), [1999] O.J. No. 1690, 43 O.R. (3d) 760, after quoting the above passage:
Since RJR-MacDonald was decided, the law of damages for Charter breach has not become significantly clear or more predictable . . .
[14] I am prepared to accept that there would be irreparable harm suffered by the appellants if the stay is not granted since it is unclear that any financial loss by the appellants would be recoverable.
[15] This case consequently turns on the third branch of the test, that is, the determination of which of the parties would suffer the greater harm from the granting or the refusal of the stay application. As predicted in RJR-MacDonald, most of these Charter-based stay applications will be resolved at the third branch of the test, “In light of the relatively low threshold of the first test and the difficulties in applying the test of irreparable harm...” (§ 62).
[16] The appellants submit through Mr. MacGillivray’s affidavit that the Town would suffer no prejudice or harm if a stay is granted. In oral argument, Mr. MacGillivray referred to Re Island Telephone Co. (1987), 67 Nfld. & P.E.I.R. 158 (P.E.I.S.C.-A.D.) as authority for taking a narrow view of public interest. That decision was, in my opinion, impliedly disapproved of by the Supreme Court of Canada in RJR-MacDonald, where after quoting from it, at §70, they continued:
71 In our view, the concept of inconvenience should be widely construed in Charter cases. In the case of a public authority, the onus of demonstrating irreparable harm to the public interest is less than that of a private applicant. This is partly a function of the nature of the public authority and partly a function of the action sought to be enjoined. The test will nearly always be satisfied simply upon proof that the authority is charged with the duty of promoting or protecting the public interest and upon some indication that the impugned legislation, regulation, or activity was undertaken pursuant to that responsibility. Once these minimal requirements have been met, the court should in most cases assume that irreparable harm to the public interest would result from the restraint of that action.
[emphasis added]
72 A court should not, as a general rule, attempt to ascertain whether actual harm would result from the restraint sought. To do so would in effect require judicial inquiry into whether the government is governing well, since it implies the possibility that the government action does not have the effect of promoting the public interest and that the restraint of the action would therefore not harm the public interest. The Charter does not give the courts a licence to evaluate the effectiveness of government action, but only to restrain it where it encroaches upon fundamental rights.
[17] There is no question that the Town is charged with a duty of promoting and protecting the interest of its residents and taxpayers when authorized by the Legislature to enact land use by-laws, and that the sign regulations were enacted pursuant to that authority. These minimal requirements are sufficient to infer that there is irreparable harm to the public interest if the stay were imposed.
[18] Another factor to take into consideration at the balance of convenience stage of the analysis, is whether the stay would result in an exemption from the by-law for only the appellants, or whether the effect of the stay would be to suspend the operation of the law for everyone. This is an exemption case, that is, the stay of the enforcement of the by-law would only benefit the appellants. In RJR-MacDonald, at §73 the court concluded that the public interest would weigh more heavily in a suspension case than in an exemption case.
[19] The appellants submit that the loss of the ability to advertise with use of the offending sign for four months pending the resolution of the appeal would cause them some unquantifiable loss. However, no evidence is offered to prove that in the year the sign was in existence, that any customers or clients were actually attracted to the law firm or the restaurant as a direct consequence of having seen the sign, which would allow an inference to be drawn that removal of the sign would result in the loss of future clients and customers. As well, there are obviously other methods of advertising available to the appellants in the interim. Furthermore, since there will be no cost to the appellants in removing the sign faces, there is scant evidence of actual pecuniary loss to the appellants, other than whatever monetary redress for loss of their constitutional right to freedom of expression might be warranted. There is no suggestion here that the economic hardship resulting from a denial of a stay would affect the long-term viability of any of the appellants.
[20] Balanced against the obscure harm that might be endured by the appellants if the stay is not granted, is the possibly equally indistinct or ill-defined public interest in continued application of the Town’s by-laws. There is no obvious public health or safety issue here as there was in the RJR-MacDonald case which concerned warnings of the health hazards of smoking on cigarette packages. Here, the Town submits that respect for the judicial system and the law, as well as the integrity of its legislative authority, must be reinforced by timely implementation of Justice Davison’s order. Although I have not been provided with a copy of Justice Davison’s decision, I presume that the legislative purpose of the sign by-law was found to be reasonable, founded on public safety concerns and the aesthetic appearance of the downtown area, and within the jurisdiction of the Town.
[21] Given that the Town is not pressing for the removal of the structure of the sign and has offered to absorb all the cost and inconvenience of removal of the sign faces pending the appeal, and considering the sparse evidence respecting the importance of the sign to the economic welfare of the appellants’ businesses, in my view, the balance of convenience favours the respondent and the public interest inherent in the continued application of validly enacted legislation.
[22] The application for a stay of execution pending the appeal is dismissed. The appellant MacGillivray should advise the respondent’s counsel within seven days of the date of this decision if the appellants accept the offer of the Town to remove and store the sign faces pending the appeal, or if they will comply with the terms of removal order on their own behalf.
Roscoe, J.A.